Three Evils of Capitalism

24 02 2015

Reblogged from https://leftymathprof.wordpress.com/3evils/

(Read the essay, or watch the 14 minute video version here in this little box, or on its Youtube page, or full-screen.)

Poverty and war have tormented us for ages, but they won’t for much longer; soon we will be forced to choose between harmony and extinction. Any compromise between those two extremes is nearing an end, because information and ecocide are both growing toward tipping points. And the new vision we need for survival is uncomplicated but also unfamiliar, especially regarding economics.

When people blame the problems of the world on “unregulated capitalism” or “predatory capitalism,” they are implying that capitalism itself is a good and healthy thing. They are implying that we have merely strayed from its sound principles into corruption, a superficial problem that can be cleaned up through reform. But these reformists are mistaken. They have not seen the world as it is; they have not understood what the principles really are. The evils of inequality, externalities, and alienation are inherent in any market economy. To halt the torment and destruction, we’ll have to learn how to share. That didn’t work in some previous attempts, but that just means we’ll have to try doing it differently; the reasons for doing it are still valid. Forcing it on people won’t work, so a change in law won’t be enough; we need a change in culture.

The problem is not “unregulated capitalism.” Writing regulations more carefully will not save us. Satan’s army of lawyers can find him a loophole whenever he wants to escape one of his contracts. And our plutocracy simply disregards its contracts — just look at all of the US government’s violations of its own laws. Money erodes its way through regulations as surely as water finds a way downhill. Any separation between government and big business, between regulators and regulated, is illusory: They share a revolving door, and sometimes a bed. The only way to avoid rule by the wealthy class is to not have a wealthy class.

And fighting against one Monsanto or Halliburton at a time is futile. It’s like Hercules fighting the Hydra: Each time he cut off one head, two more grew in its place. We must look deeper, to what Monsanto’s poisons and Halliburton’s wars have in common.

When Neo awakened from The Matrix, physical reality changed for him, but that film was only a metaphor. When we awaken from the propaganda all around us, physical objects are not changed, but their significance is changed, and our history and expectations are vastly changed.

The old world is dying; we must move on to the new world being born. How will we make the great change? I don’t know the details of that. But it has already begun; you can see it in the peaceful demonstrators being beaten by police. Awareness and understanding are spreading, and our foremost tactic must be to spread them further. When enough people see what is really going on, we will unite, and we will find a way to change things, and the violence will end.

1st evil:   INEQUALITY (3:30 in video)

The data in Thomas Piketty’s recent book shows that increasing economic inequality is a normal trend in capitalism, not an aberration. The problem is deeper than debt-based currency or any other particular method of exploitation and theft. It is inherent in all market economies, even barter economies: Market transactions increase inequality, because they favor whichever participant is in the stronger bargaining position. The only way to not have a wealthy class is by not having a market — that is, by sharing.

Increasing inequality is simplified in the board game Monopoly, which always ends with all the players but one totally impoverished. That’s the outcome even if no one cheats, so the problem is in the principles, not in “corruption.”

The recent study by Gilens and Page shows quantitatively that the USA is a plutocracy, not a democracy. Just a few people now own our homes, workplaces, debts, government, mass communications media, everything. Privately owned workplaces are little dictatorships; that’s why we hate Mondays. Progress brings higher productivity, but its benefits are pocketed by the owners of the workplaces; for the rest of us, progress means layoffs, not leisure.

Psychopaths seek positions of power over others, and even people who are not already psychopaths become corrupted by power if they acquire it; strong evidence of that was given by the Stanford Prison Experiment. We see cruelty wherever the opportunity for it arises — in prison guards, police, soldiers, workplace managers, business tycoons, dictators, or even democratically elected politicians — though in that last case, they cover it up by conducting much of their work in secret and lying about the rest. All these bullies proclaim, and perhaps believe, that they are deserving and that their victims are not.

Clearly, we should reorganize our society so that there are no concentrations of power. That requires not only replacing markets with sharing, but also replacing authoritarian hierarchical government with peer-to-peer networking. This is why I’m an anarcho-commie, which means share and don’t hit, the first two things we all learned in kindergarten.

2nd evil:   EXTERNALITIES (6:17 in video)

Any market transaction is negotiated by a buyer and a seller, but it may affect other parties besides those two. Such effects are outside the considerations of the negotiations, and so they are called externalities. During the crash of 2008, Wall Street traders often reassured one another with the acronym “IBGYBG,” which stood for “I’ll be gone, you’ll be gone.”

Externalities are more due to indifference than outright malice, and so you might think their effects would be random — sometimes harmful and sometimes beneficial — but it doesn’t work that way. The proverbial “bull in a china shop” is not motivated by malice, but he is never beneficial.

Market prices are far from true costs, because they leave out the externalities. Thus the market is not at all the “wise and efficient” allocator of resources claimed by its worshipers. Conventional textbooks gloss over this topic, as though it were something minor, but in fact externalities are enormous: War, poverty, and ecocide are inevitable consequences of any market economy. And by the way, the ecocide is a lot worse than most people realize; feedback loops are about to send us over a climate cliff.

A living whale is an awesome creature, but it has no monetary value. The parts of a recently killed whale are worth a million dollars in quick profit to someone who doesn’t care about the consequences elsewhere. That’s why the whales are disappearing. And that’s why the ecosystem is disappearing too, though it’s larger, more abstract, and harder to see.

You might think that the few people in power would get together and conspire to save the planet that they have seized for their own. But that’s not how they’re behaving.

For instance, a few years ago, the Arctic began melting rapidly. That’s one of the climate feedback loops, and it should have been a wakeup call to stop using fossil fuels before they kill everyone. But instead the plutocrats said, “oh goody, now it will be so much easier to extract fossil fuels from the Arctic!”

The market compels its biggest players to compete against each other in offering quick profits to investors, without regard to consequences. Any big players who find scruples will fall behind in the competition, and will be replaced. We need to overthrow not just the big players, but the entire system.

3rd evil:   ALIENATION   (9:06 in video)

The problem is not just in our rulers. It’s in all of us, in our culture, in the so-called “American dream“: You keep your stuff in your house, I keep my stuff in my house, and God help the guy who doesn’t have a house, because no one else can help him, in our present socioeconomic system. We get the illusion that my well being doesn’t depend on yours, and I don’t need to care about you, and in fact I can’t afford to care about you. We blame the less fortunate for their bad luck, because that’s easier than facing up to the fact that we might be next, that the system is unjust, and that we don’t know how to fix it. We may try to be kind, because that’s human nature, but that’s swimming upstream against the current of separateness.

How blind are we to our own culture? Compare it with physics. An apple’s mass, volume, and colour are objective and measurable traits, independent of any observer. The “owner” of the apple is merely a story that we agree upon, one that can be changed by whoever controls the courts. And yet it has become impossible for us to imagine an apple without an owner.

Our possessions separate us psychologically, and that in turn legitimizes our material separateness. Apathy and alienation seem inevitable and normal. We are forced to compete against each other for survival; friendships become commodities and strategic alliances. We’re distrustful, and our anxiety about lack of security is medically harmful. The wealthy are harmfully stressed too, by their desire to stay ahead, and by their lack of the things that money can’t buy. Lacking meaning, purpose, and direction in our lives, we turn to drugs and entertainments. We see ourselves alone and helpless, and few of us realize that everyone else is alone in much the same way.

No wonder random shootings have become commonplace in our shopping malls. The only thing that can make us safe is a change to a culture in which everyone cares about everyone else and no one gets left behind. But that kind of caring will require sharing. To shelter the homeless and to end the prevalence of sh*t jobs, we’ll have to restructure the entire economy, and we’ll have to change how we feel about one another.

We’ve been told — and some of us have believed it — that it’s human nature to be greedy, selfish, and lazy. We’ve been told that humans work only for private gain, and work well only in competition. We’ve been told that our culture and behaviour can’t change. But none of that is true.

The Fall from Grace was 10,000 years ago, with the invention of the word “mine,” and we’ve lived in its shadow ever since. But throughout the 200,000 years before that, we lived cooperatively, without rulers, sharing everything of importance, and that’s still our deeper nature, our genetic heritage. You can see the cooperation at any traffic merge.

“Half full” and “half empty” are optimistic and pessimistic observations of the same glass. But human nature is not just what we observe. It’s what we choose and aspire to be. Even if the reformists were right — that it is possible to make selfishness viable — why would anyone want to? Right now our culture encourages our worst behaviour; let’s replace it with a culture that brings out our better side.

I’m hoping for a miracle. That doesn’t necessarily involve supernatural intervention; Charles Eisenstein defined a “miracle” to be simply an event that most people believe impossible until it happens. The miracle I’m hoping for — and actually, I believe it is possible, even if a lot of people don’t — is that some good ideas will spread very quickly, and people everywhere will begin sharing and cooperating. That’s the only thing that might still save us from the rapidly accelerating ecocide. Can we shed our cynicism, and see with new eyes, and give each other the inspiration we need?





Money rules….

28 07 2014

Over the past 15 or 20 years, society switched from being a society to being an economy.  Today, everything has a price, and nobody does anything anymore unless there’s “money in it”.  Take Universities; fifty years ago, one could go to University, for free, and just learn….  that’s what Universities were always for.  To learn.  Today Universities are all about money, and learning how to make money.  I clearly remember our son, who at the time was doing his first science degree, coming home from University one night, scathing of the number of people studying ‘business studies’ or economics or any number of other money making pursuits on offer at these institutions.

Alex now has two science degrees and a Master….. and can’t get work.  It was, admittedly, bad timing on his part, Australia has elected an anti-science government that only believes in making money and measuring everything society, oops I mean the economy, does in dollar terms.  An economy does not need scientists, it needs bean counters….  so funding for Australia’s premiere scientific organisation, CSIRO, is being defunded, and is now starting to sack scientists.  Just when we need them most.

Putting a price on everything was brought home succinctly the other day by George Monbiot who wrote:

So just at this moment, this perfect moment of the total moral and ideological collapse of the neoliberal capitalist system, some environmentalists stumble across it and say, “This is the answer to saving the natural world.” And they devise a series of ideas and theories and mechanisms which are supposed to do what we’ve been unable to do by other means: to protect the world from the despoilation and degradation which have done it so much harm.

I’m talking about the development of what could be called the Natural Capital Agenda: the pricing, valuation, monetisation, financialisation of nature in the name of saving it.

Sorry, did I say nature? We don’t call it that any more. It is now called natural capital. Ecological processes are called ecosystem services because, of course, they exist only to serve us. Hills, forests, rivers: these are terribly out-dated terms. They are now called green infrastructure. Biodiversity and habitats? Not at all à la mode my dear. We now call them asset classes in an ecosystems market. I am not making any of this up. These are the names we now give to the natural world.

How much longer this sad state of affairs can continue, no one knows, except that it can’t possibly last much longer.  Here is the latest shock from Bloomberg….:

For the past two decades, growth in the global economy spelled higher revenues for the Organization of Petroleum Exporting Countries. Not any more.

The CHART OF THE DAY shows how last year was the first since 1993 that the value of OPEC’s total crude exports didn’t track the direction of global gross domestic product. The bottom panel shows how the group supplying about 40 percent of the world’s oil fetched lower average prices and also shipped fewer barrels year on year.

So there you have it……  the beginning of the end of the ‘bumpy plateau’ that shapes Peak Oil is about to end, and the beginning of the inexorable backside of Hubbert’s Curve is at hand.  This is as good as it gets, and all the things we value in dollars will soon be worthless.

Also of interest, and pertinent to the collapse of the plutocracy, I recently discovered this article….

Written by Nick Hanauer (a Seattle-based entrepreneur – never heard of him before now…), this telling article is a wake up call for his 0.1%er mates of his… He starts off by displaying his credentials as a filthy rich plutocrat – “You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor”, writes in the middle “I see pitchforks”, but ends with “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.”

Wow……..  are they actually waking up to themselves?  Notice how he claims to be a 0.1%er, not a 1%er..?!

Gulfstream V – in case you didn’t know!

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.

George Monbiot seems to believe in the pitchforks…..  he ends his piece with “Well, ladies and gentlemen, it is no mystery… what do we do instead?  It is the same answer that it has always been. The same answer that it always will be. The one thing we just cannot be bothered to get off our bottoms to do, which is the only thing that works. Mobilisation.”

Never mind the pitchforks…….  bring back the guillotine!