Capitalism has innate characteristics that are leading us into worldwide plutocracy. We have already crossed the threshold where the wealthiest 1% own half of the world’s wealth. This can only worsen. What should succeed capitalism is not at all clear, but it is important that we try to find out.
A key question for the post-capitalist world is, Where will the money for large projects come from if not from capitalists? I see several possible sources, among them government, ad hoc groups, citizen-government partnerships, and workers. Government is a legitimate source of initial investment, but it is not in the best interests of the country or the government itself to become the owner of most business enterprises, so any government involvement must be temporary.
The most promising source of cash for businesses, even large businesses, is the workers themselves. Worker-owned small businesses are excellent, but worker-ownership is also promising for some very large businesses. Professional managers can be hired at competitive salaries, but without becoming owners. Not that workers have a lot of money, but large numbers of workers together have a lot of money. Laws that require workers to be paid a living wage could also require that they invest some small part of their earnings in ownership of the enterprise where they work. If an initial government loan were used to start the business, worker contributions could be used to pay off the loan. This would give workers “skin in the game”, a highly motivating direct stake in the success of the enterprise.
Worker-owned businesses are a form of “socialism”, but not of “Socialism”. The very word “socialism” causes gasps of horror in the US, which is very mysterious to the rest of the world. People in the US seem to have missed the point that “Socialism” requires that the government own everything. Think North Korea. We do have a national military, a national highway system, and a national air control system, after all, and nobody thinks that’s “Socialism”. (Well, it’s true that some libertarians seem to think—against all evidence—that the military ought to be the only thing the government pays for.)
Worker-owned businesses are one of the most important responses to the worsening threat of capitalism. In a rather vague sense they are socialist, because the workers are equal in their ownership. But the company is not owned by the government. No individual can own the company or determine its direction.
The movement of capitalist investment from manufacturing to finance means that fewer workers are needed. The resulting surplus of workers places a downward pressure on wages, resulting in lower average income for all workers. This puts further negative pressure on manufacturing capitalism, because with fewer employed workers earning lower wages, the market for goods is smaller, creating a vicious cycle.
Capitalists have been allowed to shift many of the costs of their operations onto the public by calling costs they rely on such as highway maintenance, pollution, waste disposal, resource depletion, and the like “external”. These costs are socialized and billed to us. “External” costs are paid for by all of us with tax money, while profit-making costs are privatized, with all profit going to the capitalist owners.
Costs are also cut by various evasive schemes such as moving the corporate headquarters to a country with low taxes. Many of the biggest corporations pay little or no US tax. In that case the people are forced to make up for industry’s avoided costs. In the post-capitalist world this must not be allowed.
In the 2008 crash and the ensuing bailout all the losses of the “too big to fail” banks were socialized, and a year later bankers were again rewarding themselves with multi-million-dollar bonuses. Everyone lost but the bankers, although it could have been worse.
A conundrum: Much of the presumed health of an economy requires high consumer demand. High demand increases cash flow and capitalist profit. But it also has negative effects, in depletion of natural resources, increased pollution, and waste materials. In more than a few cases it’s debatable whether high demand produces a positive or negative outcome.
A truly healthy economy must define economic health less in terms of demand for consumer goods, or Gross Domestic Product, and more in terms of true physical and economic health of the population, equality, the environment, efficiency, etc.
In the recent past several attempts have been made to formalize this accounting, but none seems to have caught on, and their data are now several years behind. Even an imperfect measure gives us a more realistic picture of economic health than GDP, which counts things like the cost of imprisonment on the same side of the ledger as graduation rates, or losses from natural disasters as categorically equivalent to improved cancer survival rates.
Capitalists and bankers are in near complete control of the government today. Every member of Congress, particularly on the Republican side, votes for what capitalists and bankers determine is in their own interest, because capitalists and bankers contribute controlling sums of money for re-election efforts. (As Jim Hightower noted, “Corporations don’t need to lobby government any more because they are government.”) The continuing growth of their wealth and power will not be tempered voluntarily, let alone yielded. It is therefore necessary for a post-capitalist economy to function completely outside of this system for the foreseeable future. Only when this post-capitalist trend becomes the dominant economic mover of the country will the government be returned to the people.
Those who doubt that this degree of corporate control is real should consider a current news item, the sale of mining rights on sacred Apache grounds on federally protected land in Arizona. Mining for minerals would destroy the land forever and once again betray First Nations people, a betrayal that has been going on for centuries, and could only have come about because the enormous power of mining conglomerates has purchased enough members of Congress to make it happen. Perhaps it will not come to fruition because of the obvious illegality and amorality of the plan, but this is not certain. Similar evils have happened many times before, always in the name of profit.
A large part of consumerism serves no real purpose other than to support capitalists. It provides no benefit to the spender. I define consumerism as “spending for the support of capitalists”.
A whole industry—Madison Avenue—has developed around telling us what we must spend our money on. Often the point is to aspire to spending on “stuff” we can’t afford and don’t need. To reach upward, and spend beyond our means, which makes capitalists and bankers richer, but does nothing to improve our lives.
The post-capitalist society must instead focus on spending for things that are more worthy of our attention and our dollars. The question is how to counteract the power of Madison Avenue, which has had a century to learn how to influence us so we spend too much money on things we don’t need, and which spends billions to convince us that we do need it.
Expenses worthwhile to us include healthcare, education, and housing. Healthcare and education in particular are places where government can play a worthwhile role, as it does in advanced European and other nations. Essentially, it is far more efficient to pay for these via taxes, where the broadest possible customer base is achieved. An increasing number of nations provide free public education all the way through graduate degrees for the same reason. There is a role for government in provision of housing—we already have tax deductions for mortgage interest—but nobody suggests that government should provide housing (although even here, free housing for the homeless has been found to be a money-saving success).