It’s amazing how many people seem to have some sick form of Stockholm Syndrome for the system as it currently stands. People talk about government and economy like it has a defined role and characteristics, even though government is an abstraction we made up, and we can make up different roles and characteristics anytime we want. People talk about “the economy” the same way…as if it were a type of rock that just has certain features and that’s the way it is, as opposed to an abstraction we made up to systematize our exchanges of goods and services. This is a severe problem.
Adam Smith wasn’t a scientist, he was an economist and philosopher, and guess what? His philosophy, that has had us chasing equilibriums the way former eras chased the favor of gods for centuries, is full of holes. It assumes the “Enlightenment” model of the human mind and decision-making process, which means it says that we are all little calculators doing min/max calculations about everything and making our economic decisions rationally. But this is known now, through actual scientific research, to be false…we are very seldom rational, and make economic decisions rather badly, even when we do have all the facts (which we almost never do).
In addition to this, Smith’s system is rigged to favor capital. Capital can always decide, with impunity, to lower wages and make worker conditions poorer. The reason for this is because, as an artificial entity with the hiring privilege, they essentially have a monopoly on work. They can choose not to hire at a given wage, but the worker who has a family to support and has to eat generally can’t choose not to work at the wage offered. Since labor can’t actually force the “price” of their labor to rise to the value they put on it under pain of death and failure in personal responsibilities (in addition to the social stigma we attach to people unwilling to work at unfair wages as being “lazy” and “entitled”), then there is always an unequal power dynamic…the only equilibriums that form are those that benefit capital, not labor. Unionism was an attempt to balance this dynamic, as were labor laws, but the same people it benefits to have the rigged system have generally convinced everyone else that unions are bad, evil, and, of course, socialism, and the moment labor lost all power to demand labor laws to protect them, the NLRB was gutted and labor laws castrated.
Capitalism also assumes a scarcity of labor which will help balance the imbalanced power dynamic of capital vs. labor, which I suppose made sense back in the early days of the Industrial Revolution. It made sense that there was a lot of work to do, just to survive. But thanks to the technological and scientific breakthroughs of the last century, that’s just no longer the case. Now we have a surplus of labor, and a surplus of the main resources necessary to human survival…food, clean water, clothing, and shelter. In order to preserve the profitability of food markets, we have subsidized some foods and also actually destroyed surpluses that would have lowered prices past profitability. That’s right, people are starving all over the world, and we have more than enough food to feed everyone and the technology to do it cheaply, but we destroy the extra, or subsidize it to be used in other ways (high fructose corn syrup, anyone?) rather than feed people, all to keep profits up.
It used to be the reason why humanity had to toil was because toil was required to survive, but that isn’t true at all anymore. Now we toil to create profits for capital, but have been convinced that this is somehow the same noble labor that once put food on our table. It is not. There is nothing noble about working hard to put money in someone else’s pocket.
So why do we accept a system that is designed in such a way that the majority of people are inevitably going to be screwed? Labor is the majority, capital is the minority, and always has been, including back when they were called the aristocracy, the crown, or whatever. They have to convince us to accept these systems. Our ancestors were convinced by a combination of religion and force, but our aristocracy has been more subtle, adopting rhetoric that it is hard to argue with and a system that requires a good deal of expertise to see the “rigged” part of the game clearly, and generally the only way to gain that expertise is to already be one of the people who benefit from how the system is rigged.
We have been convinced through centuries of propaganda that this is “just the way things are”, but that’s not true. “Things” have been very different in different cultures and different eras. Consider that peasants and serfs were once convinced the same thing about feudalism through the notion of “divine right to rule”. The “way things are” was different then…it could be different in the future. We just have to actually reject a system that from its conception was meant to exploit and oppress the majority to favor the minority.
Consider that the two forms of secular economic organization, capitalism and communism, were both put forth at the same time “God” was being declared dead. The worry of the day was that without some governing principle, humanity would fall to chaos and barbarism. To that end, Smith and Marx both presented new systems…but they are both just as “religious” as the system of thought they were replacing.
In the past religions, it was “God’s judgment and providence”, a supernatural guiding force, which gave structure to the system by which people lived and organized their lives. There was no evidence for this invisible guiding force, but it was accepted anyway. Similarly, capitalism has the “Invisible Hand” of the “market”, another invisible guiding force that also has no evidence for its existence, but was accepted anyway. Communism has the notion of a “historical dialectic”, which Marx took from his mentor Hegel…again, an invisible, guiding force that also has no evidence for its existence, but was accepted anyway.
In past religions, just reward or punishment was claimed to come in the afterlife, something for which there is no evidence, through being consigned to Heaven or Hell, two places (or states of being) for which there is also no evidence, but it was accepted anyway. In capitalism, just reward and punishment is to come through the establishment of equilibriums, where all things, including labor, will cost what they are worth. These equilibriums, however, have no evidence for their existence except in mathematical models which assume Smith’s system axiomatically, but they are accepted anyway. Communism has the “communist utopia”, the state of society after the transitional period of a capitalist society to communism, where the state dissolves itself and all authority, wealth, means of production, and resources are held in common. This, obviously, has never happened and there was/is no evidence that it could ever happen. It’s almost impossible to even imagine…how, exactly, could a free populace manage the distribution of goods held in common without some rule-set to define a just distribution? “From each according to their ability, to each according to their need” sounds well and good until you ask the question of who is defining my abilities and needs.
The main thrust of my argument is this: we have generally been tricked into accepting systems of living that are:
1. Contrary to our current knowledge of the human psyche and decision-making processes.
2. Intentionally creating an imbalance in the power dynamic between the minority of our population (capital) and the majority of our population (labor) that favors the minority.
3. Based upon ideas with no evidence confirming their existence.
In addition to this, I’m saying that we have fallen into a cognitive trap that causes us to reify abstractions as if they were actual things with actual properties. It happens all the time…we talk about “government”, and especially the flaws of “big government”, as if it were a bear or a tree or a rock, taking for granted a set of properties and relations that are considered “facts”, as immutable as the laws of physics. But this is fuzzy thinking…government is simply an idea, and there have been many such ideas. All it takes is deciding to change things and acting on that decision. The same is true of “the economy”, “the law”, etc. These things exist in our heads, but we act like they exist in the world, and behave as if there were “matters of fact” about what they are and how they behave. This is folly.
Our world has changed a great deal in the last couple of centuries, and no amount of denial will change that. We can’t keep pretending there is a significant scarcity of most resources (food, shelter, clothing, water) that justifies the continued attempt to make profit from them without creating absurdities and inhumanities like burning crops to keep the market from crashing while people are starving in other countries, or having people homeless and in the streets while homes and apartments sit empty. We can’t keep pretending that there is a scarcity of labor that will keep capital honest in its hiring practices…there are more people than jobs, everyone knows it, and capital knows that it can offer unfair and inadequate compensation to their employees with impunity because those employees have to eat, feed their families, etc.
And most of all, we can’t keep making things up and then forgetting they are made up. Government is a technology, a category of answers to the problem of “how shall we live?” The economy is similarly a technology, a category of answers to the question “how do we divide our stuff?” As technologies, it should be expected that we will fix them when broken, innovate upon them where better things are possible, and make them efficient when they are shown to be wasteful. But if we reify these abstractions, if we fall under the spell of thinking these collections of ideas and methodologies are somehow “real” and “binding”, we can’t improve upon them, we can’t fix them when broken, and we can’t remove inefficiencies and inconsistencies. We’re stuck.
We live in a story, and its not a very good one right now. It’s a story that was written back when “all men are created equal” was assumed to exclude anyone who wasn’t white and male…that is, the majority of people in the world. A story that assumed that the right to own deadly weapons was important enough to put in, but the right to not be oppressed simply because of the color of your skin wasn’t. Looking back over the history of humanity, it’s easy to look at the eternal exploitation of the poor and weak by the rich and powerful and judge our species to be monsters. And it would be true. But we have been monsters because we have written ourselves that way, because we have woven a story of monsters ruling over and exploiting others.
It’s just a story, and there is nothing stopping us from imagining a new one, if we can only remember that we are the ones who made up the tale, not simply characters within it.
- Mainstream Economist: Marx Was Right. Capitalism May Be Destroying Itself (redantliberationarmy.wordpress.com)
- The General Assembly and social revolution (pogoprinciple.wordpress.com)
- “Class Warfare?” Absolutely! (psychologytoday.com)