What Capitalism Isn't

by Wholesome Rage | 1 January 2021

My biggest problem, when I tell people I’m anticapitalist, is the realization that the person I just said it to has no idea what capitalism actually is. So, I get a tortured reply defending whatever that person thinks capitalism is, which is inevitably whatever good quality they’ve projected as inherent to the system they live in.

This has happened enough times that I feel like I need to just come out and say what capitalism isn’t. Work forwards from that.

Let’s work forward from what I’d argue capitalism is, as distinct from anything else.

Capitalism is the organization of society around a specific concept of private property ownership, and it’s a simple one: If you own something then you are entitled to all the productive capacity of that thing, and you have the absolute right to deny other people the use of your property.

If someone tries to go against this then the state will either enforce those rights for you, or take your side in your enforcement of those rights.

That’s it. That’s all capitalism is.

You’ll notice that I did not use any of these words: Profit, markets, contracts, voluntary agreements, money, risk, investment, wages, labour, class.

All of those are very important concepts, and all of them are intimately tied to the capitalist structure. None of them are what capitalism are - but it does give us a great table of contents.

What capitalism isn’t:
Profits and investment
Markets and wages
Contracts and voluntary agreement
Labour and class

1: Profits and investment, or, “but I thought you lot hated the profit motive”

Profits are one of the assumptions of how capitalism is organized, but here’s the rub; Nothing you own gets taken away from you just because it’s unprofitable.

There are many think tanks, charities and media companies that run at losses because the owners benefit more from what they produce than what running them costs. Their success is then determined by how beneficial they are to their financers - not to how profitable and competitive they are in the capitalist marketplace.

Because of this, firms and individuals that would otherwise be profitable might be outcompeted and pushed out of the marketplace because they are competing against someone who does not care about the profit motive.

Capitalism says as long as they got the money from somewhere to be able to afford to do that; go wild.

It is broadly true that capitalism is organized around the profit motive, but that’s more a consequence than a requirement. Capitalism is not the only economic structure that can be guided by the profit motive, and you aren’t obligated to be profitable to keep your property.

This is important, because it means that you can agree with the benefits of the profit motive and hold an anticapitalist position.

Take syndicalism; Firms are guided by the profit motive, but are all owned by their workers. The workers are paid through a revenue sharing model rather than a waged contract - though different positions can be entitled to greater shares.

Workers owning their workplace means that how the workplace is run, and how its profits are distributed, is agreed on by the workers - the work itself is what guarantees a share of the revenue. There are still managerial roles; It’s just that managers are elected by their subordinates, and accountable to them, as collective ownership of the workplace also guarantees a say in its running, or at least a say in who’s running it.

A syndicalist can say that the profit motive is all well and good, but that the decision making process shouldn’t just be trusted to whoever has the most money - it should be done by the people who are affected by those decisions.

And if they collectively make bad decisions, then their workplace fails - revenue sharing instead of wages cuts both ways.

Syndicalism is for the profit motive, but still anti-capitalist, because it believes that the people who operate capital are entitled to its productive output - Not whoever initially paid for it.

There is also the wrong idea that capitalism necessarily drives investment: It is argued that successful owners of existing capital will have more money to purchase more capital and run it profitably as well. It is said that being entitled to the returns of that investment is necessary to motivate future expansion.

This is the way that capitalism, it’s said, uniquely rewards investment and innovation.

But worker co-ops can also be motivated by profit to expand their productive capacity, and to bring on workers from less successful firms - revenue sharing means it’s worth bringing on as many people as can increase the size of your total revenue more than they shrink your share of it. That’s just one example of investment being driven outside of the capitalist framework.

So investment cannot be used in a definition of capitalism: Non-capitalist structures are capable of driving investment and many anticapitalist systems are objectively, demonstrably better at it. Likewise, an absence of investment - as is the case in deflationary spirals - does not stop a system from being capitalist.

In fact, investment under capitalism is unique in one way: Ownership is permanent and largely unconditional.

I’ll give an example: Land, buildings and machinery can all be capital. Even though ‘land is capital’ should be ringing in your ears right now, for simplicity’s sake, I’m going to go with an industrial oven as an example.

If I buy an oven and pay a baker to operate it, I still own that oven long after the baker’s baked enough bread in it to pay for it - but the baker doesn’t own the bread that oven was used to bake.

That baker can’t choose how that oven is used. He can’t use it to bake cakes, or pottery; I’m paying him to bake bread, so he has to bake bread. This is what it means for me to own that oven.

That baker can only use one oven at a time, too - I can own as many ovens as I can afford, and hire just as many bakers to work them. I could be comatose and I would still be entitled to that bread.

No matter how long that baker works that oven, unless I sell the oven to him - which I won’t - it will never stop being my oven. It is always going to be my bread to sell.

I might be motivated to take that money and use it productively, to invest it. But I’m not obligated to. I am entitled to those earnings no matter what I plan to do with that money.

I could spend it on a yacht. Or a helicopter. A mansion. Etc.

Again, the capitalist property relation guarantees I am entitled to the productive output of the things I own. It does not obligate me to use that money wisely or productively if I don’t want to.

Capitalism means that when I die, the bakers don’t get my ovens. Whoever I name in my will does - even if I’ve never even seen the oven in my life.

Capitalism is not the profit motive
Capitalism is not private investment
Capitalism is a declaration of who is entitled to the productive output of capital.

2: Markets and motivation, or, why do anything?

Capitalism is not markets, and markets can exist outside of not only capitalism, but money and even barter.

I will never stop shilling Alvin E Roth’s “Who Gets What and Why” as one of my favourite books I’ve read in the last four years.

It’s dedicated to market design theory specializing in why marketplaces succeed and fail, and hammering in on specific examples that cannot be solved with price signalling.

Here’s a good example: Did you know that countries that pay for blood actually receive less in donations? By not paying someone to do it, it’s a charitable act; People will do it just to feel good about what they’re doing.

On the other hand, when you pay people to donate blood, that makes the exchange transactional. People are selling a part of their body - and a lot of people find that gross.

Now, this seems like it should be more appropriate under the previous section, because it’s more about the fact that the profit motive isn’t the primary driver of human behaviour. However, the last section was to emphasize the fact that however you feel about the profit motive can be irrelevant to an anti-capitalist position.

Here is where we dunk on the profit motive, in this context, to explain why it’s a bad primary motivator of marketplaces - and also to emphasize that marketplaces are not inherent to capitalism.

Roth won the Nobel in economics for his design of an algorithm that would match organ donors. Often people have loved ones who are willing to donate, say, a kidney but are the wrong blood type. Roth’s clearinghouse algorithm could chain these incompatible people together - not just straight swaps, but matching up to 7 people sequentially.

His work is brilliant, but it underscores something very important: All of those people needed organs as a matter of life or death. Allowing people to sell or buy organs, in that case, would have been perverse and somewhat vampiric.

He adds that poor people would be pressured to sell organs to settle routine debts, and that those debts could be justified by wealthier people in society by saying; “What do you mean you can’t afford a car? You’ve still got both your kidneys!”

It is better to create a donor based system - almost everyone has someone in their life willing to donate voluntarily as a charitable action. Paying people for that makes it transactional and predatory.

Supply and demand can exist outside of paying for things; Applying to limited spots in schools, medical residencies and legal internships are all important marketplaces that exist. Their needs are met without any money changing hands during the process.

Capitalism, then, is not a competitive marketplace: Marketplaces can be designed, and already exist, outside of capitalism. “Free market” capitalism is a derivative, a sub-species - but it’s not necessary to the broader definition, and things that aren’t capitalism can have “free markets”.

You can believe in the value of a free market without believing in the capitalist idea of property. You can be a capitalist without believing in free marketplaces. In fact, many capitalists benefit from actively crushing marketplaces, as we see all the time.

If we’re talking about marketplaces though, we’ve obviously got to talk about the labour market. It’s the biggest marketplace capitalism is set up to negotiate, after all; One of the biggest implications of capitalism is that when you pay people to work the stuff you own, you own the stuff they make.

So we need to talk about why people are making stuff for you - or anyone other than themselves. This is important, because most people are working for other people.

The vast majority of people in the labour force are wage-workers. Only about 10% of people in the US own their own business, with similarly low numbers in Australia and the UK. Two thirds of all Australian businesses are non-employing, which is to say, this low number includes all people who are self-employed within it.

The profit motive is really wrong, here. We know wages aren’t the main driver of people’s job satisfaction, unless they’re doing work they really don’t like.

Sociological studies find that if you pay people a high wage to perform a job well, they’ll do it well. But if you offer them increasing amounts of money to perform that same job, you not only get diminishing returns but negative results - people perform worse because there’s more pressure.

Harvard Business Review covers a lot of these studies, and I’ll quote one of their summaries here;

The first is a classic meta-analysis by Edward Deci and colleagues. The authors synthesized the results from 128 controlled experiments. The results highlighted consistent negative effects of incentives — from marshmallows to dollars — on intrinsic motivation. These effects were particularly strong when the tasks were interesting or enjoyable rather than boring or meaningless.

More specifically, for every standard deviation increase in reward, intrinsic motivation for interesting tasks decreases by about 25%. When rewards are tangible and foreseeable (if subjects know in advance how much extra money they will receive) intrinsic motivation decreases by 36%. (Importantly, some have argued that for uninteresting tasks extrinsic rewards — like money — actually increase motivation. See, for instance, a meta-analysis by Judy Cameron and colleagues.) Deci et al’s conclusion was that “strategies that focus primarily on the use of extrinsic rewards do, indeed, run a serious risk of diminishing rather than promoting intrinsic motivation” (p. 659).

Actually, in finding this article to summarize, it’s a lot more useful for building my case here than I first thought it would be. The data is presented well, but the author’s conclusions are incredibly flawed in a really obvious way.

Here it is: The author cannot reach the conclusion that people are made to do jobs that are not intrinsically rewarding.

Many times through the piece, he fails to grasp the significance of this. He rationalizes it in other ways, saying things like;

Now, a skeptic might ask if this is just a correlation showing that people who don’t like their jobs have nothing to think about other than the money. This is hard to test. Yes, that could be one reason; another could be that people who focus too much on money are preventing themselves from enjoying their jobs.
Quite simply, you’re more likely to like your job if you focus on the work itself, and less likely to enjoy it if you’re focused on money.
Is this a money-focused, engagement-eroding mindset one that employees can change? Or is does it reflect an innate mindset — some people happen to be more focused on extrinsic rewards, while others are more focused on the task itself?

“Yes, that could be one reason-” is a wonderful bit of verbal sleight-of-hand, isn’t it? In going ‘another could be’, they slide right past the fact that they haven’t disproven it, they’re just deciding not to entertain it. They give no reasons for this decision, either.

Which, considering their job title is “Chief Talent Scientist”, I’m going to go back to the maxim that people are very bad at reaching conclusions they’re paid not to reach.

I’m going to put forward my own conclusion here: A lot of jobs have no intrinsic benefits. People work those jobs because it affords them a standard of living better than other jobs available to them that suck less.

Most people don’t seek profit as an abstract, they want what they can get with that money. Creative fulfilment, social recognition, food, clothing that fulfills a need for expression, comfortable shelter and safety & security.

There are plenty of jobs people take on because those jobs are rewarding to do. The coercion associated with waged work goes against that, rather than incentivizing it.

One interesting note comes from Little America, by Rajiv Chandrasekaran. In it he notes one of the job programs the US brought to Afghanistan; They would pay people to do the chores that were previously performed by volunteers in the community for free, such as cleaning public waterways.

Then the money dried up, the US stopped paying, and people wouldn’t do that work for free any more - work that had been done on a volunteer basis for decades. The damage caused by changing the social context of this work is enormous, even to this day - like less people donating blood when they’re paid to do it.

Take a brief moment to consider that Wikipedia is an achievement greater in size and scale than the Apollo program, and it’s run entirely by unpaid volunteers.

Going back to the Harvard article, though, I want to stress that it avoids asking why are so many people working jobs they don’t value, if money is such a poor and ineffective motivator?

Anthropologist David Graeber outlines how many of us work jobs that we find produce no value to society, has no intrinsic value, in his book “Bullshit Jobs”. You can find an outline of it here. I cannot recommend that outline highly enough, but I’ll quote the most relevant passage here:

In our society, there seems a general rule that, the more obviously one’s work benefits other people, the less one is likely to be paid for it. Again, an objective measure is hard to find, but one easy way to get a sense is to ask: what would happen were this entire class of people to simply disappear? Say what you like about nurses, garbage collectors, or mechanics, it’s obvious that were they to vanish in a puff of smoke, the results would be immediate and catastrophic. A world without teachers or dock-workers would soon be in trouble, and even one without science fiction writers or ska musicians would clearly be a lesser place. It’s not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.) Yet apart from a handful of well-touted exceptions (doctors), the rule holds surprisingly well.

In fact, one very modern take on “A Modest Proposal” called Kinky Labor Supply and the Attention Tax has a fantastic insight; Labor force dropout rates have been skyrocketing for young people as entertainment gets cheaper, and because of that working more hours a week causes a sharper drop in quality of life than can be bought with the wages of working those hours. (It sarcastically proposes a tax on attention spans).

Capitalism guarantees that somebody has to pay for things: It does not guarantee anyone the means to afford them. While I’ll cover that in more detail in part four, it gives the capitalist marketplace a very interesting feature that makes it unique among economic marketplace frameworks; Crises of overproduction.

See, when I say that capitalism does not guarantee anyone the means to afford needed products, that’s a crisis to producers too - they made stuff with the anticipation of it being sold, and they might not be able to find anyone who can afford it.

Let’s go back to my previous example. I own an oven and I hire a baker to work it. I make a profit if I can sell the bread for more money than I pay the baker in wages.

Most of the workforce is paid in wages, and profits is the value difference between what is produced and what is paid. Profits can only happen, then, if the workforce isn’t paid enough to purchase all the things it produces.

So, every few years, more stuff is made than the workforce can afford, there are mass layoffs as profits are less than expected, so there’s even less money to buy things… Recession, rinse, repeat every ten years or so.

This crisis is fairly unique to capitalism. Even syndicalism gets around it a bit better because the purchasing share of the population is much closer to a 1:1 basis with what it’s producing.

The capitalist relationship of production has a uniquely parasitic element in the capitalist - that is, if I’m still entitled to profits from the things I own while I’m in a coma and unable to spend it, I’m pulling that money out of the economy. I’m acting as a liquidity trap.

I could be investing that money back into the workforce, relieving that problem. But I’m not obligated to, and I’m not nearly as motivated in pursuing more profits as economists seem to think I should be.

This is also part of an explanation for why so many jobs are “bullshit”, worthless, not intrinsically valued. I’ll quote Graeber’s piece again:

[W]hat does it say about our society that it seems to generate an extremely limited demand for talented poet-musicians, but an apparently infinite demand for specialists in corporate law? (Answer: if 1% of the population controls most of the disposable wealth, what we call ‘the market’ reflects what they think is useful or important, not anybody else.)

Because of the capitalist structure resulting in a smaller-and-smaller group of people acting as a liquidity trap there becomes a very warped sense of supply and demand.

Namely, private enterprise creates jobs largely on the basis of how much it benefits the people who can afford to pay wages, and not on how much it benefits society. The two may correlate incidentally, but are not directly linked; Private equity provides constant examples of great public harm in service of private profits.

It is true that it is much harder to become a corporate lawyer than it is to become a garbageman or a dockworker - there is a smaller supply. However, that smaller supply is only compensated because of the disproportionate demand for those jobs - and from who drives that demand.

Capitalism does work under the pretense of a free market. It’s just unlikely that it’s for your benefit. And this iteration of a marketplace is ruthlessly optimizing in a lot of ways - but very few of those ways are the ones that actually matter to you.

Capitalism is not “the free market”
Capitalism is not a meritocratic allocation of wealth
Capitalism is just a property rights agreement that enables rent-seeking within an existing marketplace

3: Contracts and voluntary agreement, or, capitalism is when the government does stuff, and the more stuff the government does the more capitalist it is.
The title of this section is an obvious joke to those in the know; It’s usually addressing a misunderstanding of communism; “Communism is when the government does stuff, and the more stuff the government does the more communist it is”

This misunderstands the leftist position in a few critical ways - note that I say ‘leftist’ and not ‘communist’, for the tip of the iceberg - but it’s a very conservative misunderstanding.

In my experience conservatives largely see taxation and government redistribution of wealth as anticapitalist. A leftist position necessarily means ‘more government’ - or more wealth being absorbed into and then redistributed by the government, either through direct payments or from the government filling roles that could have been performed by private businesses.

This ignores anticapitalist positions like anarchism, but more importantly, it ignores how critical the role of government and the state is in the enforcement of capitalism.

Let’s go back to the second bit of my definition of capitalism:

If someone tries to go against this then the state will either enforce those rights for you, or take your side in your enforcement of those rights.

Even right-libertarians will largely agree with this; There needs to be some form of state if only to enforce voluntary contracts between individuals. Some also admit maybe public roads, libraries and maybe schools can be pretty good too. Everything else should largely be organized by people pursuing their own self-interests, and government just gets in the way of that and does it worse.

The problem is that the role of government enforcement is critical to capitalism as a structure, and its enforcement role is only so big because of the inequalities it needs to protect.

Rights only exist as far as they’re enforced. And it’s that enforcement that ensures that Amazon earnings go into Jeff Bezos bank account every minute, when he’s not there to pick it up himself. It’s that right to enforcement that keeps him holding that 185 billion-with-a-b.

Importantly, this does not just fall back on the police or a police equivalent. This means the right to private security - and when the private security does its violent enforcement duties, that they will win the court case after.

It cannot be understated how critical that last bit is. Labor disputes of the early 20th century resemble civil wars, back when private armies like the Pinkertons made their name.

If miners organized and collectively seized a mine, prevented other people from working it, then the mine owners had the backing of the national guard in breaking those strikes - on the other hand, the national guard would not be called on the Pinkertons murdering strike leaders.

Even when they were cut off from their source of income to hire private strikebreakers, even when vastly outnumbered by the workers of the mines, mine owners could - and still can - rely on the state to intervene and enforce their property rights. And in cases where private strikebreakers were used, the courts took the side of property owners in issues of legality.

Remember: The owner of the mine is not necessary for that mine’s function. What is being enforced is purely their right to the value created by other people’s work - but their ability to collect that value needs enforcement.

Under capitalism, keeping the stuff you make for other people is legally considered theft. When the baker puts dough in my oven, what comes out is my bread - not theirs.

Interestingly, it is irrelevant whether the baker knows this rule when they use that oven. Capitalism is not voluntary; Someone not understanding or agreeing with my concept of ownership is irrelevant. All that matters is that the state agrees with this concept, and will enforce my property rights - violently, if they need to.

There are other concepts of ownership we could follow - there’s no reason we have to stick to this one. We sort of take it for granted this is the only way things could really be. It’s probably why we don’t question the violent enforcement underwriting these ideas.

That enforcement has to be very great - in size and in scale - to ensure that workers are not entitled to the products of their own work - ‘the fruits of their labour’ in Marxist terms.

While the damages of wage theft often vastly outweigh the costs of all property crime - robbery, theft, arson, etc - my state didn’t even introduce legislation for criminalizing it until this year - despite citing $2.3 billion dollars in wages owed to workers in my state of only 5 million people. The situation’s not much better anywhere I looked in the US or UK.

Again, the priority of our legal framework starts at property rights and works backwards from there. If at all, some days.

These current definitions of property ownership could not work without state enforcement. Any time wage negotiations broke down with a unionized workforce, that workforce could otherwise simply say: “Come and take it, then.”

What if, when that happened, the cops showed up and took the worker’s side instead? Imagine it:

“What’s this about, then?”

“He says this is his stuff, and we owe him money for it.”

“His stuff? What makes it his stuff?”

“Says he fronted the money for the factory.”

“Fair enough, how much do you owe him, then?”

“That’s the thing. He’s already taken more than double what the whole factory’s worth, and he’s still asking for a cut of the take.”

“Still? For how long?”

“Forever, sounds like.”

“Bloody ridiculous. Alright, you keep on, I’ll tell him he’s dreaming and to stop bloody calling us.”

Instead, Amazon is hiring neo-Nazis to suppress its immigrant workforce.
But there’s more to it than that. We come back to a thing I said before - Capitalism doesn’t guarantee you the ability to pay for things. This is obviously a problem in general, but specifically people need money to legally stay alive - for food and shelter without stealing or squatting.

If people are starving, shelterless and unemployed, then they are people who have nothing left to lose. The role of the state, the government, is to prevent this in one of two ways.

This is either through a carceral state - you keep all those people in prison for one reason or another, and threaten everyone else with the same - or you provide enough welfare to let steam out of the boiler.

Or, you know. The guillotine thing happens.

This is why the non-aggression principle is a joke, libertarians are all wrong about everything, anarcho-capitalists can get their heads dunked in a toilet. No contracts can truly be voluntary or without coercion under this property system, because people need to eat. They die if they don’t.

People can want to work, but nobody is obligated to pay them for the work they do, and they are not entitled to the products of their work if they do not own everything involved in the production. Can’t even grow your own food if you don’t own the land you’re growing it on - and you can’t just make more land.

The propertyless unemployed pose an existential threat, then.

The state exists not only to provide violent enforcement, but to provide an absolute bare minimum welfare that people won’t die if they stop working, and can leave truly abusive workplaces. But that definition of ‘bare minimum’ will constantly be tested, to drive people back into work that has no intrinsic worth to it.

This is not exaggeration or hyperbole. Approximately a fifth of all deaths of people under 35 in Australia in 2017 were deaths-of-despair immediately following welfare repossession notices. That’s about the same as all car crash deaths in that range.

The state is necessary to maintain this property relationship. Abolish it, and the tensions between the people who own things, and the people who need to work to earn a wage, will become unmanageable. It will be resolved violently.

There are many forms of anti-capitalism that do not need the state in this way, because more equitable property relationships do not create these tensions.

Conservatives decry big government; But conservative capitalism couldn’t exist without it. And their pushes for austerity - to ‘get government out of our lives’ - are one of the biggest drivers towards that need for violent enforcement.

Why let steam out of the boiler if you can just build a thicker boiler?

Capitalism is not a system by which people can enter mutual, voluntary contracts freely with each other - it is an inherently coercive system, backed by violent enforcement.
Capitalism is not voluntary: You can’t avoid property rights, and you have to eat.
Capitalism is a legal framework that justifies violent enforcement of a very specific property relationship.

4: Labour and Class, or, a brief summary of implications
It’s about this point of the piece that I realized I covered most of what I wanted to say. No new ideas here, then, I’m just going to bring together what I’ve already said by now.

We’ve got a few important ideas here. We have a workforce that is paid collectively less than the monetary value of what they produce. We have a very permanent concept of ownership of stuff, and that stuff includes things like land, and even water rights, and that ownership is inheritable.

None of that, on its own, goes far enough to explain why our shit’s so fucked - if you’ll forgive my academic terminology there.

But capitalism is also said to be a transition from a class society, compared to what came before. Now anyone can become rich and own things, and rich people can become poor through incompetence and mismanagement of their money. So we are told.

Then a French guy came along, kicked the economics staffroom door in, and shouted “I > R!”

Oh, shit.

Basically, a French economist named Piketty says that it’s been pretty constant in all capitalist countries since the early 20th century that returns from interest on investment has been greater than the rate of economic growth, and labour’s share of GDP reflects that.

Basically, what it means is that for a century now the people who already had money have taken a greater share of economic growth than everyone else combined.

What is not happening is economic mobility - people work hard, buy things, provide a better life for their kids. No, overwhelmingly, it turns out that each generation has been poorer than their parents - even if they have nicer stuff.

Nicer stuff got cheaper, you see. A bigger TV doesn’t make up for housing, healthcare, and education costs being astronomically less affordable.

Here’s the rub; Automation means you can make more stuff, cheaper. But it means less people drawing wages for making that stuff, and more money going to the people who own the machines.

Technological innovations means that the US is making twice as much steel, and better quality steel, than it was in the 1980s. Back then it took 10 man-hours of work to make a ton of steel. Now it takes one and a half - meaning downsizing from 650,000 steelworkers to 140,000 to make more, and better quality, steel.

Even under something like syndicalism the company would have to buy back their stakes or keep paying them for the profit-share. Under capitalism, they just stop getting paid.

Many other productive industries are going through similar versions of this. It’s making ‘stuff’ better, and cheaper. But far more low-skill jobs are opening - like retail - than high-skill or high-paid jobs to take the exodus of the automated.

Going back to the Graeber piece I cited earlier, way back;

Over the course of the last century, the number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically. At the same time, ‘professional, managerial, clerical, sales, and service workers’ tripled, growing ‘from one-quarter to three-quarters of total employment.’

The depressing reality of automation - and this is an observation that goes back to the beginning - is that nobody owes compensation to the people it displaces. There’s no reason producing more stuff with less work should be harmful to society, we’ve just made it that way.

Most people’s income comes from wages. Wages aren’t set at a fraction of society’s productive capacity, how much we can afford to give everyone - wages are largely determined by the lowest amount the owners of capital can negotiate you down to.

Here’s what we have to show for fifty years of revolutionary automation: Adjusted for inflation, the US federal minimum wage in 1968 was double what it is today. That’s if you can even get a job if you’re displaced, though. Here in Australia, the unemployment pension hasn’t been adjusted for inflation in twenty five years even though our GDP has tripled since then.

These declining wages effectively mean that most people are shut out of most forms of property ownership, and a lot of my generation owns more debt than they do assets - the most debt of any generation in history.

And we owe that debt to someone - a debt that accumulates interest at a rate faster than we can make the things to pay for it. A debt that affects how much we can give to our children - and how much will be passed on to the children of those we are indebted to.

Their children will inherit assets. Our children will inherit debts. Their children will charge rent to our children who cannot afford houses and apartments of their own. That’s just how it is.

I’m… looking down the barrel of the idea I’m probably always going to be too poor to afford kids of my own, honestly. Declining birth rates seem to show I’m really not alone in feeling that, too.

Global wealth’s been going up, but almost all of it’s being consolidated into fewer hands, because the 1% are utility monsters. Class divides didn’t go away: We just made the lines blurrier. These days you can only see it clear on a graph.

Capitalism is not the rising tide that lifts all boats; Automation is
Capitalism is not a system for workers to negotiate salaries for what they’re worth
Capitalism is just the agreement that buying the machines means owning their output


There’s a lot of long and boring and complicated reading behind all this. Chomsky and Adorno & Horkheimer and Gramsci all have important books to read on culture as private industry, on the role media plays under capitalism, on ideology and propaganda. Graeber and Piketty and Richard D. Wolff and other economists have great explanations in books a thousand pages long.

Seriously, I use Capital and Ideology and Debt as medicine balls if I’m exercising while I read.

But what I need to convey here, what I want to emphasize after all this, is that the underlying problem is this specific notion of property rights, of these permanent and unqualified rights not only to ‘stuff’, but to everything that ‘stuff’ is used to make, forever-and-ever.

As long as that underlying concept remains true - that people can have this complete all-encompassing ownership of stuff, and they can enforce that with legitimate, state-approved violence - we will always come back to this point again and again and again.

You cannot tax it away; Taxes have been high before, extremely high. The incentive structure remains the same as the one that got us here.

You cannot solve it with increasing welfare: Welfare does not address the root causes of the problems, only their most offensive symptoms.

You cannot say it is the best system we have tried: That is not only historically ignorant, but ignorant of current experiments, contemporary ones going on in the world right now.

We can have an anticapitalist world with free markets, the profit motive, price incentives, you name it. Because none of those things are what capitalism are.

Capitalism is just a legal framework that means that owning capital - basically everything but your toothbrush - entitles you to the productive output of it, regardless of anything else you do. It is simply that concept of ownership and what ownership means.

That’s all it is. But that’s what needs to be changed.

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