I’ve been a small business owner for most of my adult life. I’ve lived by the rules of capitalism and have always thought of it as the best possible economic system available, and the one most compatible with the idea of personal freedom. But as I get older, its flaws have become more glaring, to the point that I’m starting to wonder if there are other ways for us to work.
Let’s start by acknowledging its formidable benefits:
- It offers the best alignment with our nature as people. As humans, we are wired to do, to achieve, to grow, and to accumulate resources, and capitalism allows all of this. It rewards positive traits like hard work and creativity, and punishes negative traits like sloth.
- It offers the best alignment with the ideal of personal freedom. It does not impose on our rights to do as we wish, and it does not require government interference. It does not involve some government agency confiscating the fruits of our work because others “need” them. It benefits from smaller, less invasive government.
- Historically, there’s been nothing more effective in improving the quality of people’s lives. We have more “stuff,” more spending power, and more purchasing options; our living conditions are better; and poverty is much lower, and much less severe, in capitalist countries. Capitalism is also the best solution for racial problems: Capitalists see green, not black, brown, or white.
- In terms of our working lives, we work less and we work safer, thanks in part to technological innovation and in part to the freedom of workers to pursue better jobs.
- Capitalism even helps international relations: Countries that trade are far less likely to fight.
- Perhaps most importantly, there don’t seem to be any better alternatives. Options like the various forms of socialism or mixed economies fall short when it comes to aligning with our values and in terms of their historical results.
That’s an extremely strong list of benefits, and maybe they override any flaws; after all, no system is perfect, and maybe you just have to choose the best of your imperfect alternatives. But the flaws gnaw at me more and more, and I have to wonder if there’s some way that they can be accounted for.
What flaws? How about:
Cost Shifting: Pollution
Profit comes by maximize your sales and minimizing your expenses. And many of the industries that actually produce things, like manufacturing, power, and agriculture, have minimized costs by dumping hazardous waste products that then become the public’s problem. In the US, up through the 1970s and 80s, we saw rivers catch on fire from dumped industrial toxins and debris for example, and we still have close to 2,000 “Superfund” sites where the government is cleaning up land that was contaminated by industry. And even today we see coal plants dumping thousands of gallons of toxins into the drinking water supplies of cities like Pittsburgh.
And what happened when the government enacted stronger environmental laws in the 70s and 80s? Manufacturing found its way to other countries, unencumbered by environmental rules, so they could continue polluting without picking up the tab. As a result, we see countries like China where polluted air leads to 1.6 million deaths per year, more than a quarter of the key rivers are unfit for human contact, and 20 percent of the soil is contaminated.
Cost Shifting: People
I’m not going to argue over “unfair” wages; I recognize their role in supply/demand here, and in developing economies elsewhere. What I do have a problem with is the fact that there’s no room for nationalism in capitalism, as evidenced by industries’ mad dash to send American jobs overseas solely to take advantage of lower pay rates. According to the Wall Street Journal, “U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers … cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the US Commerce Department show.” IBM, for example, now employs more people in India than in the US, mostly because the average pay for a high-tech worker there is around $17,000 versus $100,000 here in the states. Then there’s the value of bringing lower-paid people to the US to compete with citizens for jobs, both through illegal immigration (which corporate America is wholly in favor of) and the H1b work visa program.
We live on a finite planet, yet the growth model inherent in capitalism requires that we use more and more resources to produce and sell more and more products. The resources we get from nature, like ocean-harvested seafood or precious metals, are being depleted at an alarming rate, and as Chris Martenson notes, it requires more and more energy to not only obtain those resources, but it takes more and more energy just to get the energy to do that work in the first place! And in those cases where we farm resources, like food or animals, our processes have been so Frankenstein-ed with hormones, antibiotics, and genetic modification, or so inhumane, that they hardly seem appropriate for a healthy society.
Capitalism grows as people consume more, and consumerism has become a defining characteristic of our society. As a society, we measure success and happiness in dollars, and it seems that we would rather self-medicate to mask our barren souls than question the system that produced them. One can argue that capitalism works best when paired with a moral code like Christianity, but I think that in the battle between God and money, God has lost.
In a capitalist model, money is the central measure of value – and when people hold up the dollar as their highest value, the means become secondary to that end. That’s why you see so politicians so easily bought by the wealthy; it’s why you see corporatists using the government, and the military in particular, to strong-arm their way into exploiting smaller foreign countries.
Maybe this is just first-world whining over a system that is necessarily imperfect. Again, I see all the good that capitalism brings, both on an individual and societal basis; this is not, by any means, a call for socialism, government interference, or anything of the sort. But I can’t escape my growing awareness of the downside of this system either, and it bothers me more and more.