The contradictions of capitalism…
I’m not an “economist” – but I don’t think it matters these days, as economists don’t seem to know what they are doing either.
And you don’t have to be a rocket scientist to know that there is something wrong with capitalism. A brief review of the world’s news today will bear that out. There have been, in the last week alone, economic protests in India, China, Argentina, Spain, Greece, Russia, America, Central America, Africa, France, Ireland, and throughout the old Soviet bloc. (Most of which go unreported in the mainstream media – for reasons discussed later. Go to websites like YouTube, or Al Jazeera, and you can spend hours watching protest videos people have posted.)
The 400 people who control 80% of the world’s economy discovered, with the arrival of Ronald Reagan and Margaret Thatcher in the 1980’s, that they no longer had to accept a 5-10% annual return on investment. (Please note that my father, a very successful businessman in the “60’s and ’70’s was quite happy with a 3-5% return on investment.)
As the Cold War was coming to an end, and new untapped markets were opening up all over Eastern Europe, Russia, and Asia, investors started dreaming in profit Technicolor and saw the potential for 10-15-20-50% returns on their investments.
Wall Street started lobbying heavily for the deregulation of how capitalism was to operate. The financial sector wanted – no they argued that they needed – freedom to maximize their profits, and that this would be good for everyone. (It was the age-old “trickle-down” theory. If billionaires were allowed to make even more money, there would magically be more money for everyone.)
And so, all the regulations that came in as a result of the Great Depression in the 1930’s (when unregulated capitalism had imploded on itself) were slowly stripped away.
I am not going to get into the details of that timeline, suffice it to say, that Reagan, Bush, Clinton, Bush Jr., and Obama have all readily accepted the continued deregulation of the economic system. The only difference between the Democrats and Republicans is the speed at which deregulation should occur.
As a result, over the past ten years, we have seen the steady disappearance of the middle class all over western democracies. We have seen, as well, the steady concentration of wealth at the top of the economic pyramid.
This concentration of wealth, this expectation that profits must increase annually at rates of more than 10% (at a minimum) leads to a myriad of social and economic (and environmental) problems.
Some of the results are quite ridiculous. If highly successful companies like Apple or Exxon release quarterly reports that do not meet Wall Street expectations – even if they just achieved record quarterly profits – their stock value will in fact decrease.
Canadian banks have been reaching new heights of profits almost every year since the mid-1990’s, and yet they return, again and again, to government regulators demanding that they be even freer to make more – lest they fall into immediate and long-term decline. Hence the 25% interest on your credit card debt.
General Motors, bailed out to the tune of billions, last year recorded record profits, and on the very day they announced these profits, they also closed another auto plant in the US, and moved production to China.
The western governments, who have been nothing more than the financial sector lap-dog in all of this deregulation (they have always worked at the service of business interests, but had since the 1930’s put some restrictions and regulations on business to insure that the wild swings of capitalism would not return), have dealt with the resulting social unrest by increased policing and surveillance of its people.
At least 90% of all “terrorism” is the result of abject poverty; when there is no hope of change.
No one today wants to address the fundamental structural problems of capitalism. There is an almost complete absence in the public forum of a real discussion about these structural issues. This is not surprising given that one of the fundamental results of deregulation has been the relaxing of media ownership. Four corporations now control 90% of the American media. Ten multi-national corporations now control 80% of the world’s media. The same companies that control the media also have multi-billion dollar military contracts. Why would they want to talk about the problems of capitalism?
The capitalist economic model has lifted millions of people out of poverty, financed great discoveries in medicine and science, and has brought down national borders everywhere, which has allowed us to see that we do indeed live and share the same concerns about the long-term health of the planet.
But capitalism is never static, moves to its own internal mechanisms, is organic, and, if left to its own devices, moves across the planet like a cancer.
It demands constant growth, next year’s return must exceed this year’s (even if, for example, this year’s return was a record, or the ninth year of record-breaking profits. The system demands more – always more.) This inevitably leads to monopolization (as the big eat the small), the further concentration of wealth in fewer and fewer pockets, and the need for more and more deregulation in order to further maximize profits. Consumer goods must be made more cheaply – which means we actually have to consume more often, as goods wear out more quickly – which means we ultimately consume more resources and further degrade the planet.
So now we are reaching the perfect storm, as many of these intrinsic contradictions in the economic system begin to collide with reality.
Just as there is enough food produced in the world to feed everyone, there is also enough money in the world for everyone. But when it is concentrated into fewer and fewer hands, the rest of us are left to run faster and faster, just to keep our heads above water.
Where does it end? Either it leads us to charismatic political leaders who lead us down the path to fascism and war and the total collapse of economies (from which we start over-like so many times in the past), or, we address the contradictions as mature world-citizens, incorporate the environment into our economic equations, and put Human Rights front and centre.
There are a million little examples of people and communities stepping up to address these issues – again rarely covered by the media. But they are fragmented and isolated and resisted by larger forces. But they are our ultimate hope for the future.
I have little optimism for what will happen in the short-term. The storm is too big at this point, and the people too easily divided to address it with any sort of coordination.
The 21st century will be remembered for near global economic collapse and environmental chaos. I will not be here to see what comes out the other side – but I see the potential for an environmental spirituality to grow out of this chaos.
But then I’m ultimately an optimist.
And I can safely ignore, from my coffin, the 2-3 centuries of pain and suffering that it will take to get there.