Capitalism is a global system of production and exchange that has expanded to nearly every corner of the world. It is a system that has been revered for its capacity to produce unprecedented amounts of food and wealth in human history. So then why in the richest country in the history of the world in which 133 billion pounds of food can be thrown away in a year, are one out of every 6 children in the US food insecure?
How do we account for this failing? How are we to account for what Mike Davis has called the “Sophie’s choice” that working people have faced during the coronavirus pandemic in which they are forced to choose between earning an income or their health? How are we to account for international climate scientists declaring that unless the world is radically transformed in the next decade, the earth will become an increasingly impossible place to live for millions of people and countless other species?
Our response to these issues depends on our understanding of capitalism and its historical development. For example, if capitalism seems the only way human life can be organized, if it seems that capitalism has always existed, then we surely cannot imagine doing away with it. But if we see that capitalism has never been our fate but has always been constructed, imposed, and managed by and for the benefit of relatively few people, then we see that there is no reason that we must accept it.
Capitalism can and must be abolished. While it may be hard to see what new world is possible, we must insist that this world, full of irrationality and horror, is not necessary.
What Came Before Capitalism?
Prior to the rise of capitalism in Europe, feudalism was the dominant economic system for centuries. Based in the countryside, the feudal system consisted of large landed estates under the absolute rule of manor lords. Feudalism was an economy in which birth dictated destiny. Those born into the nobility enjoyed a privileged life, but the serfs on the manors worked long and hard and had few rights. They were “tied to the land” and by law were not allowed to leave.
As an economy, feudalism lacked competition. The manors were for the most part self-sufficient and produced only to satisfy the needs of those on the manor with everyone’s role in production fixed and strictly defined. There was no job mobility. Serfs were required to work on the manor lord’s land a set number of days per week; otherwise, they produced for themselves. Within the towns small-scale production proliferated with a workforce that was organized into guilds that by law had a monopoly over the production of specific products, thereby again precluding competition.
Because of its rigidity, feudalism was not equipped to deal effectively with changing circumstances. At times the standard of living of the population suffered steep declines.
The lack of individual rights only compounded the misery of the majority of the population who had no voice in how their society operated. Rulers enjoyed absolute power bestowed by “divine right” and conferred privileges on other members of the nobility through personal contracts. But this left the vast majority with no rights and without a voice.
Philosophers of this period defended this structure by comparing society to a kind of organism composed of different organs where each organ played a special role defined by its specific function. Analogously, they continued, people have different aptitudes: some are good at manual labor while others excel intellectually. In order for society to properly operate, everyone must devote themselves to the task they were best qualified to perform, which for these philosophers was defined by birth. If you were born into the serf class, it was because you were good with your hands.
The Rise of Capitalism
In the 14th through 17th centuries, capitalism’s emergence in Europe shattered the entire network of feudal social relations. Capitalism reorganized society, both economically and politically, on an entirely new philosophical foundation. At that time, apologists of capitalism argued, in stark contrast to the philosophy of feudalism, that people are all creatures of nature and are “naturally” and equally self-interested and selfish. While capable of living in isolation, we form societies out of individual self-interest once we realize that far more wealth can be produced by cooperating with one another. Capitalism was thought to be a more rational way to organize production than the estate system because it allowed for a fluid and effective division of labor
Capitalism was accordingly constructed on this atomized, individualistic vision of the human being where everyone is assumed to be naturally competitive and “out for themselves.” 18th century philosophers such as Adam Smith argued that in pursuing our self-interest we promote the common good: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.” In this way each person “intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end [“that of society”] which was no part of his intention.”
In other words, by incorporating human selfishness, competition, and individuality into its inner mechanism, capitalism, it was argued, would unleash the creative and productive powers of humanity that had been suppressed by feudalism and create a society of wealth and prosperity. And in fact, capitalism soon far out-produced the former feudal economies of Europe.
Capitalism did not only revolutionize the economy. The new philosophy of human nature underlying capitalism gave birth to an entirely new set of political institutions. Given the view that we are all fundamentally and equally natural creatures, where no one stands above another, a democratic system based on the equality of human beings seemed appropriate. Political leaders no longer ruled by “divine right” but by the consent of the people being governed. Equal human rights were assumed to be everyone’s birthright.
The Heavy Price of Capitalism
Although capitalism succeeded in multiplying the productive powers of humanity many times over, before long it became apparent that these gains were won at a heavy price for most of humanity. What Adam Smith did not emphasize was that capitalism rapidly became defined by a clash between two fundamentally different classes. On the one hand, there is the capitalist class. On the other, the working class.
The capitalist class are the owners of the means of production (the buildings, the machines, and the raw materials used in the production process) who wield unprecedented wealth and power. The company’s profits go entirely to them. And unless they encounter resistance, the capitalists dictate who has a job, how long the workday lasts, every step of the work process, and what pay the workers receive. The working class is at their mercy until they decide to organize and fight back.
By the mid 19th century, it was clear to many that capitalist society was far from perfect. The rate of exploitation of the working class became so intense that the working day was extended to 18 hours in some places, making the life of a feudal serf look enviable. But it was Karl Marx who was the first to show why with the most complete theoretical account of the capitalist system that has ever been produced. In his seminal work, Capital, Marx showed that irreconcilable, antagonistic class interests define the relation between the capitalist class and the working class.
As a rule, capitalists must compete with each other for survival, and those with a higher profit margin have a competitive edge. Therefore, capitalists have a strong incentive and are at times compelled to reduce wages to a minimum – even below the minimum – for their own survival. But the working class wants a comfortable life with sufficient money to support themselves and their families and enjoy leisure time. Consequently, there is an ongoing war between these two classes, each fighting for its own interests.
The Class War
The capitalist class has intensified this class war during the past five decades when barriers to world trade dropped, globalization took root, and competition heated up. In response to this new dynamic, the US capitalist class unleashed a massive assault on the working class.
Part-time, temporary, and precarious work has rapidly replaced better-paid, secure positions. Super-exploited gig workers have proliferated. The capitalists’ war on unions has seen the percentage of unionized workers plummet from 35 percent of the workforce in the mid-1950s to 11 percent today. Workers who attempted to unionize have been threatened by their bosses: “57 percent of their employers had threatened to close the business if a union was formed; 47 percent threatened to cut wages or benefits; and 34 percent fired workers who supported unionization.”
With the decline in unions, wages have dropped. The federal minimum wage in 1968 was $11.55 in today’s dollars compared with $7.25 today. And here is a typical trend: “In the nation’s slaughterhouses, the average worker in 1982 made $24 an hour in inflation-adjusted dollars, or $50,000 a year. Today the average meatpacker processes significantly more meat — and makes less than $14 an hour.”
Employers have routinely stolen from their workers with impunity: “The Economic Policy Institute estimates that employers illegally deprive workers of more than $50 billion in wages each year by underpaying them or requiring unpaid work; violators are rarely punished.”
To keep different groups of workers competing with each other, capitalists have aggressively used the timeless strategy of “divide and conquer.” This strategy has proved effective for maintaining their dominance to maximize their profit margins. “As the share of female workers in a given industry increased, wages fell for employees of both sexes.” By severely underpaying and under-employing Black American workers, employers save money on two fronts: They save by not paying Black American workers as much as white American workers. And everyone loses since white American workers are less likely to complain when they see others who are worse off. In order to maintain systemic racism especially against Black Americans, police have played the role of an occupying force in Black communities and have been allowed to commit rampant murder with impunity. Because of the divide and conquer strategy, the capitalist class has not only encouraged racism and sexism, but many forms of hatred, especially against those in the LGBTQI community. While abolishing capitalism alone will not eliminate this hate, it will represent a significant step in that direction by removing the monetary incentives to treating some people as second-class citizens.
An Assault on Everything
Far from Adam Smith’s claim that people promote the common good when they aggressively pursue their own interests, just the opposite has happened: While pursuing their private interests, capitalists have produced misery for the rest of humanity, not to mention jeopardizing all life on earth.
The attack on the working class has been accompanied by a wholesale attack on all living creatures as the fossil fuel industries, which are subsidized by the US government by billions of dollars every year, continue to fill the atmosphere with CO2 and imperil the planet, all for their private profit. And there is a long history of industries polluting our rivers, our air, and the ocean, which is developing huge “dead” zones. Today, thanks to capitalism, we are witnessing a massive extinction of species without even a second thought from the corporations that are responsible and with little media attention. But human lives are dependent on a rich biodiversity. When we harm other species, we harm ourselves.
To make matters worse, the working class cannot count on elected “representatives” to protect them from the power and greed of the capitalist class. Money underlies almost every government decision. As departing senator Tom Udall recently observed: “Secret money floods campaigns to buy influence, instead of letting the voters speak.” Two highly-respected professors conducted an extensive study in 2014 about who influences government decisions and concluded: “Economic elites and interest groups can shape U.S. government policy — but Americans who are less well off have essentially no influence over what their government does.”
Not surprisingly, while the bankers committed massive fraud in the lead-up to the 2008 economic crisis they caused, it was the working class who paid the cost. No bankers were indicted for their crimes, but millions of working-class Americans lost their homes.
In 2020, California Governor Gavin Newsom declared a “climate damn emergency” in response to the devastating California wildfires. But his administration during the same year doubled the number of permits issued to oil and gas companies for drilling.
Perdue Pharma lied about the addictive powers of their opioids. They paid illegal kickbacks to doctors who promoted them. McKinsey, a consulting firm, encouraged Perdue Pharma to “turbocharge” their OxyContin sales because the profits were off the charts. Thanks to these companies and others like them, and thanks to corrupt doctors and corrupt retail outlets, 450,000 Americans got hooked on opioids and died from overdoses during the past 20 years, but the likelihood of any of the guilty parties going to jail for mass murder or any of the rest of their crimes is almost zero. This is a result of a system that is based on the principle of only looking out for oneself.
Corporations time and again initiate illegal schemes to fleece the public. Wells Fargo bank created millions of additional “services” for their customers without their consent or knowledge and then charged them for these services, raking in millions of dollars. The student loan industry has been plagued with corruption, resulting in students being forced to pay far more than they would otherwise owe. The worst a corporation can expect for punishment is a fine, making the risk often worthwhile.
The public is often the victim of corporations using manipulative advertising to lure people in to deals that undermine their interests. The government refuses to challenge this predatory behavior.
Politicians ignore what the majority of Americans want, making a mockery of the claim that our major political institutions are “democratic.”
Not content with exploiting the American working class, the US capitalist class aims at dominating the entire world in order to safeguard access to raw materials, markets and cheap labor. With the most powerful military in the world, the US government does not hesitate to enforce its imperial interests in Latin America, Southeast Asia, the Middle East, and Africa by initiating wars of conquest or overthrowing unfriendly heads of state by covert operations.
In the 1930s the US working class responded to the Great Depression with a massive upsurge. They organized sit-down strikes, general strikes, and local strikes, at times engaging in direct battle with the police. They won the right to form unions, Social Security benefits, welfare, and pay raises across the country. But under capitalism, victories are never secure. By launching an assault in the 1970s, the capitalist class has reduced working-class conditions to those of the Gilded Age.
Under capitalism, the class war never rests. When the working class relaxes, it loses.
Socialism or Barbarism?
As Marx and Engels argued, in order to achieve the liberation of humanity, capitalism must be replaced by socialism, which is based on the principle that “the free development of each is the condition of the free development of all.” Socialism is a movement “of the immense majority, in the interests of the immense majority” where production is conducted “by freely associated men, and is consciously regulated by them in accordance with a settled plan.” In other words, it is a society governed by the democratic will of all its members, not the dictatorship of a small, wealthy minority who use the power of their money to exploit the rest of humanity for their own personal profit.
Science has now conclusively confirmed that the individualistic conception of human nature underlying capitalism is factually wrong. Humans are a social species. We cannot function properly when forced into extended periods of isolation such as solitary confinement. In fact, isolation makes us more vulnerable to mental problems. We need one another, not simply for the production of wealth, but for the satisfaction of deep psychological needs. This thesis received a striking confirmation during the colonial period of US history. Native American societies placed far more value on their communal relations with one another than on the accumulation of private, individual wealth. Accordingly, no Native Americans defected to join European colonial society, despite all its material wealth, but many of the European Americans left to live in Native American communities.
In direct opposition to capitalism, socialism represents a society where community takes precedence over the private accumulation of material things. It is a society where everyone’s basic needs are met, everyone has an equal voice, where policies are determined democratically after a full discussion, and where every individual is a valued member and recognizes that their own freedom is inseparable from everyone else’s freedom. Finally, it is a society that establishes a human relation to nature where we learn to live in harmony with it, using nature to fulfill our material needs while taking care not to permanently harm it, and where we protect and appreciate nature’s sacred places and awesome beauty.
History shows that the future is not fixed. As the writer Ursula le Guin once said, “We live in capitalism. Its power seems inescapable. So did the divine right of kings.” Human beings succeeded in abolishing feudalism and overthrowing those kings. For the sake of humanity and for the sake of all living things, capitalism must be abolished.