Capitalism, it would seem, is here to stay. Its great competitor, communism, was defeated in the titanic conflicts of the twentieth century. Even China has succumbed to its allure, as Quinn Slobodian observes in Crack-Up Capitalism, creating a system in which a capitalist economy is integrated with communist control of society as a whole. The few countries still committed to communism old-style, like North Korea, are military dictatorships with a wretched immiserated population.
Capitalist societies succeed, communist or even socialist ones don’t. That is the message of successive governments throughout the West since the Reagan-Thatcher revolution of the early 1980s. Capitalism benefits everyone, we are told, because it creates wealth which spreads in ripples throughout society. The trouble with this metaphor is that ripples are strongest nearest to the centre of the impact which produced them, weakening as they spread, until in their furthest reaches they have no effect at all.
Images favoured by politicians are often deceptive in this way. A favourite of Thatcher’s was the trickle-down effect in which wealth produced by capitalist entrepreneurs seeps through to the rest of society. This is unintentionally more honest. Capitalist wealth is a gusher, it implies, and those who produce it enjoy it most. Even so, drips somehow percolate downwards as we lean with open mouths at a dribbling standpipe.
These metaphors express a truth, then, but it is one which apologists for capitalism desire to obfuscate, because capitalism creates nodules of wealth and power which give the very wealthy a disproportionate influence over how politics and society are organised.
The ‘clumpiness’ in the distribution of wealth and power is not unique to capitalism. It is a fundamental property of human interaction. When I was a teenager I used to argue with my conservative parents about this. I believed (and still believe) that in a just society everyone should receive the same income. My parents countered that even if such a society existed, some would spend all they had while others would be thrifty—as they themselves were— so with time wealth would again become unevenly distributed. This used to anger me, but I have come to see that they were right.
My idealism also failed to take into account the will to power of individuals within a society. There is ‘clumpiness’ here, too, with strong-minded, ruthless individuals coming to the fore, accruing wealth and influence at the expense of others. This is true as far back as we can look into the prehistory of settled societies.
It was true from the start of the Communist revolution in Russia when all men and women were declared equal, but where some, as George Orwell understood, were more equal than others. Everyone was a ‘comrade’, but a Comrade General or a Comrade Politburo member, had status, power, and privilege enfolded in his—it was almost always his—terms of office. Equality in the USSR was a sham.
Capitalism works best for the benefit of society when it is regulated by government, and when resources such as water and electricity, and key services like the Royal Mail, are owned by the people through the state. But capitalism hates regulation because it inhibits its powers to expand and to maximise profit. Under Reagan and Thatcher the lie became buoyant that a deregulated market is best because the market knows best. It is self-correcting and any errors or excesses will be dealt with efficiently by market forces. The 2008 financial melt-down gave the lie to this, but it is still peddled as a justification for the attrition of central government and state ownership. Privatisation is the thing, even when time and again it proves to be inefficient, at the expense of the public good.
The pursuit of profit makes unregulated capitalism ruthless vis-à-vis the mass of humanity because capitalism sees humans as a resource. These days all big concerns have ‘human resources’ departments, abbreviated to HR which discretely draws a veil over the deeper meaning of the term. For capitalism, humans are always a ‘resource’. The slave trade between Africa and the New World drew on ‘HR’ to maximise profit on plantations; the industrial revolution, too, drew on ‘HR’ in coalfields, quarries, cotton mills and steel mills, housing workers in minimum conditions, and paying minimum wages, to maximise profit for owners and shareholders.
Humans are a problematic resource for capitalism, however. Slaves revolt; workers form unions; demand better conditions, better pay; enter politics to challenge its power base. Capitalism works best, in its own terms, when the input of humans is reduced to a minimum. Which is what successive waves of automation have achieved. Banks are closing, forcing customers to do their own banking online; supermarket check-outs are being replaced by do-it-yourself check-out machines. Humans are costly, machines less so. Developments in AI will complete the minimisation of the human element in the next few decades. Where humans are still unavoidable, they will be employed under ‘gig’-economy conditions, on zero-hour contracts, in a state of insecurity without union representation.
Humans are problematical in another way, however, because while capitalism seeks to dispense with them as a workforce, it needs them as ‘consumers’, a term which is so ubiquitous that hardly anyone stops to consider what it really means. Just as low-paid industrial workers in the nineteenth century were ‘hands’, so now we are all ‘consumers’, individuals reduced to the wheelers of silver trolleys piled high in those cathedrals of capitalist allure, the supermarkets. But as humans are removed from the workforce, or reduced to basic wage jobs, they have less money with which to ‘consume’. The products of capitalism therefore have to be manufactured as cheaply as possible, which means depressing the price paid, for example, to farmers, and outsourcing manufacturing of clothing to impoverished countries like Bangladesh where labour is cheapest. Capitalism doesn’t want humans but can’t do without them. As the rich continue to get richer at the expense of everyone else, it is a dilemma that remains unresolved.
Because the aim of capitalism is to maximise profit, it is essentially anti-democratic. Democracy exists, in theory, as a form of government of the people by its elected representatives, but governments of this kind tend to impose restraints on capitalism such as the minimum wage, standards in hygiene, environmental regulations, and laws governing monopoly. Crucially, too, democratic governments seek to tax business enterprises, because taxation is one of the prime means of raising income with which to provide public services. Taxation is for the public good, but it is not viewed as a good by capitalism which seeks to subvert government control, by forming parliamentary lobbies, by financing the campaigns of politicians and political parties known to favour deregulation, by threatening to move its factories and its wealth to countries with fewer restrictions that are more ‘welcoming’ to private enterprise. Faced with these threats governments are frequently blackmailed into making tax concessions, conniving at the establishment of ‘free ports’ and ‘enterprise zones’ which exist within democratic states but are effectively outside government control.
Over the past forty years, capitalism has been remarkably successful in subverting democracy, especially in countries like Britain and the United States. The Conservative and Republican Parties have successively reduced central government while starving local government of funds, outsourcing as many functions of government as it can, including the privatisation-by-stealth of the National Health Service, and reneging on environmental policies that are a minimum if we are to have any hope of averting ecological collapse.
Anything can be bought, anything can be sold, that is the predominant view of capitalism and far-right Conservatism, as witness President Trump’s attempt to ‘buy’ Greenland from Denmark.
Capitalism in its contemporary manifestation is now almost beyond political control. Indeed, it forms an alternative power structure, not merely running side-by-side with democracy but hybridised with it, so that any attempt to exert control over capitalist forces has an impact on the economic base of democratic government. Something must be done. Nothing can be done. That is the situation in which we find ourselves, and while the supermarkets overflow, while the owners of forty million cars in Britain have access to cheap petrol (or increasingly cheaper electric vehicles), the majority of voters will put up with the leaching of power away from democratically elected governments which are, or ought to be, their safeguard against capitalism unchained.
In democracies, the judiciary has traditionally had an important role interpreting and upholding the law, separated from the executive power of the state. The judiciary, however, can be subverted when a governing party has a strong majority in the House of Commons, or in Congress and the Senate, repealing laws it doesn’t like, and packing the higher courts with judges who are more in sympathy with its policies. This is happening in the United States, as Jeffrey Toobin has demonstrated in a recent article in the NYRB. Judges in the Supreme Court and Circuit Courts are appointed for life. Currently Republican appointees are in the ascendent in both. According to Jeffrey Toobin, the Courts are heavily involved in rulings which undermine the power of federal agencies. It is a policy of deregulation by the back door with the intention of lifting restraints on the excesses of big business while dismantling the powers of central government. The environment, workers’ rights, public health, the right of assembly, the right to protest, all are being whittled away, leading step by step to a democracy in name only.
Where that will end, nobody knows. Unless it is opposed by the people at the ballot box, however, it will not end well.