Matthew T Grant


Tall Guy. Glasses.

The Trouble with Capitalism

When I was a student, I was a communist sympathizer.

I say “sympathizer” because, while I was never a Communist Party member, I was sympathetic to the critique that capitalism was a system based on exploitation and that the ends of capital were pursued by national governments in the Northern Hemisphere, in the form of colonialism and imperialism, to the detriment of people in the Southern Hemisphere and elsewhere.

(Before you accuse me of being naive about the crimes of communist regimes from Stalin to Pol Pot, please read this post. Generally speaking, I believe that one party rule is a recipe for corruption, incompetence and, at worst, outright gangsterism. I am also opposed to “utopian” politics and, in fact, see utopian inclinations in every political ideology right, left and center.)

I was reminded of these sympathies this morning while reading the New York Times (noted running dog of imperialism and propaganda tool of the CIA).

Exploitation and Disenfranchisement

First I read that corporate profits, as a share of national income, are at their highest point since 1950, while personal income is at it’s lowest point since 1966.

As a way of explaining this state of affairs, the Times wrote:

With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.

In other words, even though businesses are enjoying record profits, they are using unemployment as a hammer both to keep wages low and drive greater productivity from those “lucky” enough to have a job. If that isn’t a case of “exploitation,” I don’t know what is. (I believe that it also gives the lie to GOP contentions, dating back to the Reagan era, that policies which benefit business lead to lower unemployment and “benefit everybody.”)

Then I read that the poor would be hit particularly hard by the budget cuts going into effect as part of the “sequestration” to which both ruling parties (Republican and Democrat) had agreed. Imagine a headline that read, “The Rich to Be Hit Particularly Hard by Sequestration.” The fact that you will never see such a headline speaks to the fact that the rich actually have a say in what the government does and the poor (for lack of a communist party?) do not.

Globalism as a Capitalist Tool

Finally, I read this article about the rise of state-sponsored hacking. While everyone agrees that the threat is real, and will only continue to increase, the article also states:

… the administration has failed to convince Congress that the first line of defense to avert catastrophic cyberattack is to require private industry — which controls the cellphone networks and financial and power systems that are the primary target of infrastructure attacks — that it must build robust defenses.

A bill containing such requirements was defeated last year amid intense lobbying from the United States Chamber of Commerce and others, which argued that the costs would be prohibitive.

In other words, although the hacking of private companies with direct connections to our infrastructure is already happening and could have dire consequences for the entire nation, private companies (currently enjoying record profits) don’t want to spend the money that would be necessary to defend against this eventuality.

Aside from that fact that this demonstrates how companies want to enjoy the protection of a sovereign government without paying for it (or, more accurately, by getting someone else to pay for it), it also shows something that communists had long claimed: capitalism is internationalist. Given the global flow of capital (the first article above emphasized that US companies have successfully profited from the growth of emerging economies in India and China, for example), companies do not feel any particular loyalty to this or that national entity. And since profit (not the prosperity of their home country) is their primary concern, why should they?

What Is to Be Done?

Communism, for good AND ill, has been relegated to the ash heap of history. Capitalism flourishes.

While I have grown more sympathetic to the latter (this computer on which I type and the home in which I type are both, in numerous ways, fruits of capitalism), I don’t have to go much further than the morning paper (or, the morning paper’s iPhone app—thanks again, capitalism!) to recall my sympathy for the former.

Category: Ethics

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2 Responses

  1. J Slawney says:

    A pensive and somewhat divided position. Wage suppression–on which much corp growth since 2009 has been built–will eventually bite the discr consum sector in the backside, as savings and credit contract (as they already are). Corporate profits on average have peaked with existing strategies and unless input costs decrease profits will continue to decline. The labor market for workers in the USA is caught between the rock of downsizing plans and hard place of demands for improved efficiency/cost controls. That said, the easiest demographic to target for wage dumping are the 50+s who need to return to work desperately for retirement savings ramping–accordingly, the 50+ demographic is the most expansive in wage-slave growth in the US at this time. I do not see an uprising of these grey panthers in the near future.

  2. admin says:

    A nuanced and thoughtful comment. Thanks!

    On the Grey Panther front, a middle-aged uprising is an interesting, if remote, proposition though, to the extent that they folk (us) represent the tail-end of the Baby Boom, perhaps such an uprising could be driven by nostalgia for the activist days of their/our youth.