Arguments for capitalism, refuted (part 16: capitalism and fascism, part 1)

Racism, sexism, homophobia, transphobia, xenophobia, anti-Semitism, and Islamophobia are poisons that originated and have developed over the course of history. They’re always around, alas, but they are shaped by political and economic conditions: they increase in strength and prevalence during the economic recessions and depressions which are par for the course under capitalism, when anxiety, rage, and fear are most prevalent and far-right politicians who legitimize hatred proliferate like toadstools on rotted logs after a rainstorm.

Under “normal” circumstances, capitalists are able to use various mechanisms (ranging from sham elections between corporate-controlled candidates to dreaming up new and ever more dangerous financial instruments to enslaving people through debt to old-fashioned state violence) to suppress the masses’ unhappiness and make capitalism seem stable (although capitalism is an inherently unstable system because the principle of profit maximization demands constant expansion). But when the economy goes into crisis (as is “natural” for capitalist markets), these mechanisms begin to fail, and people’s fury at being deprived of a decent life when the rich gorge themselves can no longer be ignored.

Under “normal” circumstances, capitalism, coupled with the ideologies of white supremacy, male chauvinism, and heteronormativity, promotes a mentality that champions money, power, strength, beauty, technology, spectacle, and (a very narrow, stupid version of) efficiency. It privileges symbols over substance, images over reality, circuses and horse-races over serious politics, suits and ties and briefcases over normal clothing. It idealizes capitalists, mostly white men, and celebrities. Capitalism indoctrinates people to measure value by wealth and to try (vainly) to satisfy their psychological needs through consumerism. It encourages self-expression, but only for a narrow band of privileged people. Everyone else is to conform to the fashion standards, patterns of thought, and values set by the powerful.

Capitalism marginalizes anyone who doesn’t conform to its ideal image of the virile white, straight, Christian billionaire businessman: the poor, the homeless, the disabled, women, minorities, anyone who doesn’t abide by bourgeois fashion standards or meet bourgeois beauty standards. The marginalized often internalize the loathing and hatred that the system directs their way; this creates resentment and rage, which simmer and slowly come to a boil. All of this is fascism in embryonic form.

Anger and disenchantment with the status quo aren’t immediately political. They are moods that can be harnessed to good political ends (uniting the people around genuine economic justice, a la Bernie Sanders) or to evil ends (stoking hate, scapegoating the wrong people, and making phony promises, a la Donald Trump). Under “normal” circumstances, the masses are denied representation by the capitalist elite and knuckle under. All of the emergencies that people face regularly under “business as usual” don’t get expressed or redressed. But when the masses are “mad as hell and not going to take it any more” (Network-style), they no longer accept being shunted aside.

In a culture that is so thoroughly saturated with fascist values, in a culture where some considerable portion of the masses are filled with self-loathing because of all of the messages capitalist society sends them about their self-worth, in a country where many people think they’re just “temporarily embarrassed millionaires,” as John Steinbeck put it, this is the perfect recipe for fascism. But provided that people’s smoldering rage is channeled in the right direction, it could also be a recipe for democratic socialism. What determines which path a country takes? Why do I think fascism and capitalism are two sides of the same coin? How exactly are fascism and capitalism connected? And what relevance does this have for the present? Join me tomorrow and find out.

Arguments for capitalism, refuted (part 15: capitalism and racism)

Much has been written about the connection between capitalism and racism, and I can’t possibly cover every aspect of such a complex topic. I’m not even going to try to address the history of global colonialism and imperialism. This is also a very controversial topic on the Left. I’m going to try to tread carefully, but I’ll make clear at the outset that my intent is not to downplay the urgent need for racial justice, and I don’t believe that there’s a trade-off between racial and economic justice.

If you want to read more on some of the things I will talk about here, here are some great articles (in the name of unabashed self-promotion, I’m putting my own article first):

Slavery was the hellish epitome of capitalism, capitalism with all of the niceties removed. Human beings with more melanin (the vast majority of whom were African-Americans, but some of whom were Native Americans) were brutally instrumentalized, treated as sources of labor and maximally exploited for the sake of capitalists’ profit margins. They were given enough food, water, shelter, and medical treatment to replenish their labor-power – and nothing above that amount. Northern banks and Southern plantation owners collaborated to convert their labor into surplus value.

Native American lands were forcibly seized, and the land and its natural resources were (and are) vigorously exploited for the sake of large corporations’ profit. Native Americans are subjected to pollution, environmental degradation, and the deprivation of basic human rights like access to clean, safe drinking water, all for the sake of fossil fuel CEOs’ paychecks and Wall Street hedge funds’ bottom lines. The struggle over Standing Rock and the Keystone XL pipeline is symbolic of so much of the awful history America has when it comes to racism. One could similarly write about the history of Latinxs, Asian-Americans, and countless other non-white groups.

Regardless of whether it was consciously or unconsciously developed as a tool for dividing and conquering, as long as it’s existed, racism has been used as an ideology to split poor and working-class people up and shore up capitalism. Poor whites derived a ‘psychic income’ from living in a white-supremacist society and looking down on poor African-Americans; throughout American history, many efforts to create coalitions for economic justice (e.g., the Populists, labor organizing drives in the 1940s and 1950s) have collapsed because of racism.

Race is a great distraction from class. But that’s not to say that race isn’t important and deserving of attention in its own right or that class isn’t racialized. This isn’t yet another attack on identity politics. God knows that centuries of racial injustice need to be addressed head-on. But it is to say that appeals to racism can be used to undermine emancipatory politics.

Conservatives use racism to gain power and ram through deeply unpopular right-wing economic policies; they use racism and white supremacy as a way of getting some to vote against their economic interests (and of depriving many people of color of the chance to vote). Neoliberals use a neoliberal form of identity politics (please note that there’s more than just ‘neoliberal identity politics’; see the In These Times article above for more on this), a form of politics that focuses on symbolism and superficial representation as a way of distracting from huge economic injustices. Neoliberals use race cynically. True representation is, of course, tremendously important. Women, people of color, and the LGBTQ community must be properly represented in the media, culture at large, and the halls of power. But neoliberal identity politics gives us tokenism, not true representation, and it doesn’t address economic injustice either.

For example: Hillary Clinton had the temerity to attack Bernie Sanders because he supposedly wasn’t anti-racist enough and because breaking up Wall Street wouldn’t solve racism. Wall Street, of course, is extremely racist (Exhibit A: Wells Fargo’s mortgage racism), and precisely because class is racialized, economic injustices disproportionately affect people of color. Even if Bernie hadn’t had a strong racial justice platform (which he did), targeting economic inequality would’ve disproportionately helped out people of color anyhow.

Any movement for emancipation needs to address racism, sexism, homophobia, and transphobia. But all of these identity-based forms of discrimination are intertwined with capitalism and have economic consequences, as we saw with the statistics on America’s racial and gender income/wealth gaps. One of the most serious consequences of the capitalist system’s usage of racism as a tool of control and self-protection is that, when shit hits the proverbial fan, racism, xenophobia, and nationalism become weaponized in the form of fascism, which is what we will discuss next.

Arguments for capitalism, refuted (part 14: debt, healthcare, & banking stats)

Today, we’ll tackle debt, healthcare, and banking-related statistics. The American capitalist economy is distinguished by its extremely high levels of unnecessary private debt, in part because higher education, healthcare, and housing aren’t treated as human rights.


Healthcare (all these stats will get much worse if the Republicans repeal Obamacare; market-based healthcare systems are a nightmare)


Here and here are two articles on how Wall Street has gobbled up the economy.

  • Unbanked: 7% of households (2015) = 9 million households 
  • Underbanked: 19.9% of households (2015) = 24.5 million households
  • Size of the financial sector relative to the economy as a whole: 30% of corporate profits
  • Check out this graph of financial sector size over time taken from James Kwak’s blog.
  • Bailout money paid because of 2008 financial crisis: $16.1 trillion. See also here and here.
  • Yearly government subsidy to Wall Street: $83 billion – this is basically the same as Wall Street’s total annual “profits.” IN OTHER WORDS, WALL STREET MAKES NO MONEY. THE PROFITS ARE SUBSIDIZED BY THE TAXPAYERS.
  • 1 in 3 bank tellers are on welfare because the big banks are too stingy to pay them a living  wage. This costs taxpayers around $900 million a year. So we provide Wall Street extra corporate welfare on top of the $83 billion a year and the $16.1 trillion from the 2008 crisis.

Arguments for capitalism, refuted: waste, malnutrition/hunger, and homelessness statistics

Here’s another comprehensive article on poverty.

Today, we’ll delve into the statistics related to food waste, hunger and malnutrition, child poverty, and homelessness, all of which are caused by a system that cannot rationally distribute resources so that everyone’s basic human needs are met and that “human rights” is more than just a slogan. Think of all the unnecessary pain and suffering, much of it endured by children. Human beings deserve better, especially in the richest country in human history. These are global problems, but we’ll focus on the American statistics mostly. The numbers speak for themselves.

Food waste

  • Annual American food waste: 35 million tons in 2012
  • Percentage of food that is wasted in the United States: 40% (cost of $165 billion)
  • Global food waste: 33%, estimated yearly cost: $400 billion

Hunger and food insecurity

Child poverty

  • American people in poverty between 18 and 64 (2015): 24.4 million (12.4%)
  • American children below 18 in poverty (2015): 14.5 million (19.7%) – in other words, 1 in 5 American children are poor
  • Child poverty, as measured by UNICEF (2012): 32.2% of American children (1 in 3 American children are poor); US is 36th out of 41 wealthy countries
  • Percentage of children in low-income families: 43%


  • Estimate of number of Americans who are homeless:  564,708 people on any given night
    • 36,907 (6.38%) are children
    • 47,725 (8.33%) are veterans
    • 269,991 (47.6%) are disabled and unable to work.

Arguments for capitalism, refuted: inequality statistics

Today, we’ll address inequality. Let me warn you that what you’re about to read is really ugly. Here’s an EPI fact sheet on poverty and inequality.

  • The 12 richest people in the US have more wealth than the bottom 50% of Americans (= roughly 160 million).
  • 2015 GINI index (a measure of income inequality, 0 = perfectly equal, 1 = perfectly unequal): 0.479

Income inequality, in general (stats from here)

  • Top 1% share of income in 2015: 22.03%
  • Top 10% share of income in 2015: 50.47%
  • Bottom 50% share of income in 2014 (2015 figures not available): 10.09%

Wealth inequality, in general (stats from here)

  • Top 1% wealth in 2014: 37.24%
  • Top 10% wealth in 2014: 72.18%
  • Middle 40% (10%-50%) wealth in 2014: 27.15%
  • Bottom 50% wealth in 2014: 0.06% (NO, YOU’RE NOT MISREADING THAT. The bottom 50%, because of debt and massively unequal income distributions, have pretty much zero wealth.)

Gender inequality (Stats come from a fabulous report by the American Association of University Women, which you should definitely check out for its extensive data and clear graphs)

  • In 2015, median annual earnings in the United States for women and men
    working full time, year-round:

    • women: $40,742
    • men: $51,212
  • 2015 earnings ratio = $40,742/$51,212 = 80%
  • 2015 pay gap = [$51,212 – $40,742]/$51,212 = 20%

Racial income inequality (Graphs taken from a fantastic Demos study)

Screen Shot 2015 03 27 at 10.24.09 AM

Screen Shot 2015 03 27 at 10.24.26 AM


Racial wealth inequality (Graph and data taken from a fantastic Demos study)

  • Median white family wealth in 2011: $111,146
  • Median Latinx family wealth in 2011: $8,348 
  • Median black family wealth in 2011: $7,113  

A good read on racial income and wealth inequality is here.

And here’s another graph, taken from the Pew Research Center:

Wealth Inequality by Race

Arguments for capitalism, refuted: statistics on poverty

I’ve been treading lightly in terms of providing data and statistics, but in the next few posts, I’ll be providing statistics on the economy and political system. Today, we’ll address poverty.

  • Official poverty rate: 13.5% (2015) = 43.1 million people
  • Percentage of Americans who are either poor or low-income: 50%
  • Percentage of population WITHOUT $400 readily available for an emergency: 47%
  • Percentage of households with NOT enough savings on hand to cover 1 month of lost income: 55%
  • Percentage of Americans who DON’T have 6 months’ expenses on hand for a major emergency: 75%
  • Percentage of households fitting at least one of the three following categories: savings-limited, income-constrained, or debt-challenged: 70%
  • Are the American poor better off than the poor in other developed countries? No.

Arguments for capitalism, considered and refuted (part 12: opportunity cost, creation of new wants)

The pro-capitalist story ignores opportunity cost and the subjectivity that lies behind consumption. What do I mean by these terms?

Opportunity cost is a measure of what’s lost by not using a particular resource in another (and better) way than it’s currently being used. It’s a variation on the theme of wastefulness. In the case of capitalism, there are many opportunity costs that add to the costliness of the system as a whole, as outlined in yesterday’s post. A short list follows:

  1. The cost of having wealth and income so distributed as to relegate millions to poverty and all the problems associated with not having enough money
  2. The cost of all of the money wasted on advertising, money which wouldn’t need to be spent if products were distributed in a different way and elections weren’t open at all to private money (Does the advertising industry employ people? Yes. But could they be meaningfully employed otherwise, or simply be freed to enjoy leisure? Yes.)
  3. The cost of having food so distributed that a third of it is wasted annually

The pro-capitalist story assumes that people just have preferences. It ignores the fact that preferences are actually plastic and can be molded and shaped by advertising, mass media, schooling, etc. People can be convinced that they “need” things that they don’t actually need. In fact, part of the whole point of capitalism is for capitalists to discover new things that the people with money are willing to pay for, regardless of whether those things satisfy genuine human needs.

Capitalism thrives on artificially creating wants. It blurs or altogether erases the distinction between needs and wants. Some wants are perfectly acceptable. Obviously, we shouldn’t be limited to only satisfying the basic needs necessary for continued bodily existence and health. But as long as there are people whose basic biological needs go unfulfilled, it’s a travesty that we have a system which licenses and encourages people to spend many billions of dollars a year on thoroughly unnecessary things which don’t appreciably add to human happiness. Societies only have so much wealth, and all wealth, being the product of social labor, is fundamentally the same, contrary to the public/private distinction the pro-capitalist story would have us uphold. The way that societies choose to put their public and private wealth to use says a lot about their morality and about the reasonableness of their economic and political systems. A moral, rationally constituted society would make sure that everyone had enough to be happy.

Delving into the psychological, anthropological, and sociological research on happiness would take far too long for us to do now; I might do it at some later date. But I hope my point is clear. Not all markets should exist. In short, just because there is demand for something, that doesn’t mean there actually should be a market for that thing.


Arguments for capitalism, considered and refuted (part 11: view of society, boom-and-bust cycles)

Anyone who tells you that the 2016 Democratic Party platform was the “most progressive” in American history is LYING (or MISINFORMED). Consider the 1940 Democratic Party platform, which says: “We have attacked the kind of banking which treated America as a colonial empire to exploit; the kind of securities business which regarded the Stock Exchange as a private gambling club for wagering other people’s money; the kind of public utility holding companies which used consumers’ and investors’ money to suborn a free press, bludgeon legislatures and political conventions, and control elections against the interest of their customers and their security holders. We have attacked the kind of business which levied tribute on all the rest of American business by the extortionate methods of monopoly.”

Back to the arguments for capitalism. The two parts of the pro-capitalist story we’re going to debunk now are as follows:

(1) Society is the aggregation of all private citizens and private firms.

(2) The boom and bust of the market, the shifts that drive businesses out and result in periodic crises which destabilize entire societies, is simply part of the process of “creative destruction” that capitalism requires.

In response to (1), society is more than just private firms and private individuals. Our government and public agencies are a key part of what makes civilization possible, and political participation is an important part of what makes us human. Treating the public sphere as secondary or unimportant is a strange and unjustified capitalist prejudice. The private wouldn’t be able to exist without the public. The word “individual” used to mean “unable to be divided (from the whole).” Individuals need the public realm just as much as they need the private realm of family, friendship, and love to fully realize themselves.

In response to (2), and following up on the post where I listed just some of the many market failures of capitalism, the boom-and-bust cycle is (1) incredibly wasteful and pointless, and (2) extremely costly. People pour their time, energy, money, and passion into businesses which end up getting shoved out of the market by big-box corporate leviathans with far more resources. Workers at small businesses are thrown into unemployment, small business owners are impoverished, and culture is lost when everything is homogenized, as happens when capitalist markets move towards their oligopoly/monopoly phase.

Human beings actively create economic and political systems. To create a system which then escapes your own control seems to me the height of folly. To treat the market as a god issuing decrees from on high is simply absurd. Yet this is what capitalism does when it turns “the business cycle” into a timeless “truth,” severs the link between the real/productive economy and the financial/monetary economy, and accepts that “animal spirits” will wreck the economy every now and again. We throw away millions of tons of food a year even as millions of children suffer from malnutrition and die of hunger. People languishing for want of food, clothing, and shelter in the midst of plenty and overproduction is the absurd condition capitalism creates. We are capable of creating a system that achieves a permanent steady state without periodically plunging itself into devastating and prolonged crises.

The 2008 financial crisis is estimated to have cost the US economy over $22 trillion. As any good capitalist would do to determine economic viability, let’s do a partial cost-benefit analysis of capitalism. Add up the cost of all the recessions and depressions over the course of capitalist history. Now, add to this the opportunity cost of the inefficient allocation of social resources in the form of people working unnecessary jobs, unnecessary competition between nearly identical private firms, advertising spending, overhead costs for corporations, the production and conspicuous consumption of luxury items, etc.

Leave out costs related to market failures: the moral, environmental, and health-related/psychological costs and costs associated with economic underdevelopment due to poverty, homelessness, the lack of adequate early childhood care, educational inequality, racism, sexism, heightened levels of anxiety and stress, the under-regulation or non-regulation of important products, and all the other ills that plague capitalist societies. Even if you ignore these many costs (and environmental costs alone are enormous and possibly unmeasurable) and stick simply to the costs associated with inefficiencies of capitalist economic structures, I find it really, really hard to imagine how capitalism doesn’t end up in the red. On the positive side of the ledger, “innovation” just doesn’t cut it, especially when most capitalists only “innovate” products that benefit the small fraction of the population with enough disposable income to buy them.


Another interlude

Check out an interesting blog post from Adam Tooze on income growth over the last forty-ish years here.

Here are some more notable quotes from Marx, taken from his masterwork Das Kapital:

  • Capitalism is unnatural, actually a product of history: “One thing…is clear – Nature does not produce on the one side owners of money or commodities, and on the other men [human beings] possessing nothing but their own labor-power. This relation has no natural basis, neither is its social basis one that is common to all historical periods. It is clearly the result of a past historical development…” -Capital
  • Gains in productivity don’t translate into reduced work because the length of the workday is a matter of class power: “[I]n the history of capitalist production the determination of what is a working day presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labor, i.e., the working class.” -Capital
  • Capitalism is irrational and creates useless jobs to keep people busy even after gains in productivity mean that workers could enjoy much more leisure: “The more the productiveness of labor increases, the more can the working day be shortened; and the more the working day is shortened, the more can the intensity of labor increase. From a social point of view, the productiveness increases in the same ratio as the economy of labor, which…includes not only economy of the means of production, but also the avoidance of all useless labor. The capitalist mode of production while on the one hand enforcing economy in each individual business, on the other hand begets, by its anarchical system of competition, the most outrageous squandering of labor-power and of the social means of production, not to mention the creation of a vast number of employments, at present indispensable, but in themselves superfluous.” -Capital
  • Capitalists view workers as mere tools: “[I]t is self-evident that the laborer is nothing else, his whole life through, than labor-power, that therefore all his disposable time is by nature and law labor-time, to be devoted to the self-expansion of capital. Time for education, for intellectual development, for the fulfilling of social functioning and for social intercourse, for the free play of his bodily and mental activity…moonshine!” -Capital
  • How capitalism reproduces itself: “[Capitalism]…reproduces and perpetuates the condition for exploiting the laborer. It inecessantly forces him to sell his labor-power in order to live, and enables the capitalist to purchase labor-power in order that he may enrich himself. It is no longer a mere accident, that capitalist and laborer confront each other in the market as buyer and seller. It is the process itself that incessantly hurls back the laborer onto the market as a vendor of his labor-power, and that incessantly converts his own product into a means by which another man can purchase him. In reality, the laborer belongs to capital before he has sold himself to capital. His economic bondage is both brought about and concealed by the periodic sale of himself, by his change of masters, and by the oscillations in the market-price of labor-power. Capitalist production, therefore, under its aspect of a continuous connected process…produces not only commodities, not only surplus-value, but it also produces and reproduces the capitalist relation; on the one side the capitalist, on the other the wage-laborer.” -Capital
  • Wealth for the few and poverty for the many are directly connected under capitalism: “Accumulation of wealth at one pole is…at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.” -Capital