20th Century Capitalism is Unsustainable
“Capitalism is destroying the planet. The two old tricks that dug it out of past crises — War and Shopping — simply will not work.” ~ Arundhati Roy
“Capitalism tries for a delicate balance: It attempts to work things out so that everyone gets just enough stuff to keep them from getting violent and trying to take other people’s stuff.” ~ George Carlin
“The machine that we built
Would never save us that’s what they say
That’s why they ain’t comin’ with us today” ~ Jimi Hendrix
Western Capitalism as a system is a very recent concept. When Adam Smith proposed free-market capitalism(An Inquiry Into the Nature and Causes of the Wealth of Nations — Adam Smith, 1791) humans have already been part of civilisation for 6000 years. The rise of capitalism can be tied to the rise of both colonialism and the industrial revolution. The colonialists were spreading across the world and they needed quick and fast access to money, which led to the eventual rise of capitalism. This is the time the world had an industrial revolution and for the first time in history were capable of large-scale production. While capitalism led to growth and prosperity for the society, it created few long terms and short-term problems. We all analyse the landscape of shifting business. The solutions sit at the intersection of the public sector, private sector, and community.
Throughout the analysis, we will see, how little community engagement has been done throughout 20th-century capitalism. We will discuss these problems in the context of the current environment and why they are not sustainable. We will propose an alternative theory at the end of the discussion.
Whose value is it?
The champions of free-market capitalism have always argued in favour of capitalism as it creates value for everyone. However, the way values are perceived is evolving. As Ramirez proposes in two views of value creation (Ramírez, 1999) values can be co-produced by both the company and customers. This framework challenges us to reconsider 20th Century capitalism. Companies like Ikea has successfully redefined their value chain by including customer in the process creating values(Walters and Lancaster, 1999). With the advancement of technology, there has been an attempt to bridge the gap of information asymmetry and give users more power in value creation. Traditional business models are getting challenged and the Shared economy is evolving(Poon and Ng, 2017). Multiple existing industries have shifted to a model where the users get more access and are more integral parts of the system. For example, Taxi services to Uber, Hotels to Airbnb, Traditional Movie industry to YouTube marks a shift to users co-creating values. Even in the financial sector, there has been an attempt to democratise financial services through bitcoin where the value is generated by users rather than the firm itself. More extreme examples will be Open-Source Projects like GitHub and Linux, where the users collectively decide and creates values. The gradual shift to a collaborative model of capitalism is a threat to 20th-century capitalism where value creation was strictly attributed to corporations.
Additionally, 20th-century capitalism is not exactly free-market capitalism (Bresser-Pereira, 2012). In the current form of capitalism, the firms were getting stronger. Instead of acting as an agent of the free market, they are acting as the main organiser of the free market. Big corporations like Google, Apple can sometimes create demand-based out on perception and control that demand through multiple channels. User engagement in value creation will challenge the oligarchy model of capitalism.
Whose resource is it?
We do not have forever. The resources of the Earth are limited. The overuse of resources has created significant environmental changes. Common pool resources (CPRs) are limited or scarce resources, for which property rights are uncertain…characterized by situations, in which (1) consumption of the resource by one party limits the consumption of that resource by another party and (2) it is challenging to exclude any party from resource consumption(Rules, Games, and Common-pool Resources — Elinor Ostrom, Roy Gardner, James Walker, James M. Walker, Jimmy Walker, 1987). The common pool resources include water, air, and the likes. Climate change has reached an alarming level and many of the common pool resources are getting polluted beyond repair.
The pollution level in some countries has reached a point where regular human lives are being affected. For example, parts of China and India are at an alarming level of air pollution(The 10 Largest Cities in the World | Cities | US News, 2019) throughout the year. Global warming has melted the ice caps. Multiple low-lying cities are drowning. While we can argue about resources, if you are a fisherman in Jakarta, this is real(The impossible fight to save Jakarta, the sinking megacity | WIRED UK, 2019). As Greta Thunberg says, “Right here, right now is where we draw the line.” This is happening now. Common pool resources are finite. If the current method of maximising short-term monetary profit does not change, it is not long before the planet becomes uninhabitable. The next generation is worried about their future. With the rise of next generations of activists like Greta Thunberg, 20th-century capitalists are re-evaluating their ways. Companies are evaluating their accountancy practices to become more sustainable. Green accountancy practices are being developed to prioritise long-term sustainability (Cho and Patten, 2013).
Capitalism and Democratic form of Government
“The basic logics of capitalism and democracy are fundamentally different and lead to considerable tension between the two. Both have different claims to legitimacy: unequally distributed property rights on the one side, equal civic rights on the other”(Merkel et al., 2014). Multiple academics point out that Capitalism is not just an economic theory, it is also a political ideology. Corporations were always powerful enough to interfere with states and democracy. From the rise of the East India Company to recent big corporations interfering with the sovereignty of Nations, there are many examples of corporations controlling nations. Companies take advantage of weaker governments and interfere with the mandate of the people. As Dahl argues in his paper there is no incentive for economic actors motivated by self-interest to govern the societies(Swanson, 2007).
Many argue that Capitalism as a mode of production — or, more accurately, of destruction — has always been based on the whole of the globe. Reversing the common notion, therefore, as Wallerstein points out, the entire world has to be the unit of analysis — not a First, Second, or third world, nor an individual nation-state, since the nation-state is only a consequence and perpetuation of the international division of labour, or world order(Historical Capitalism with Capitalist Civilization — Immanuel Maurice Wallerstein, 1995). This is what we call “the illusion of the nation-state.” Even though democracy initially benefits from the presence of capitalism, soon enough there is a conflict that rises between these two in a legitimacy struggle. In the most recent US elections, one of the major topics of debate was how much accountability corporate has to the states. The agents of capitalism also try to have either direct or indirect influence on the government. This is not sustainable in the long run. Democracy tends to be a more stable form of governance. This uncertainty gives rises to violence in society(Hogg, Kruglanski, and van den Bos, 2013). Many argue that the rise of the American brand of capitalism is one of the major reasons for the recent rise of social extremism(America’s Brand of Capitalism Is Incompatible With Democracy, 2018). With a recent shift to a consumer-based economy, capitalism needs a more and more stable flourishing economy. If Capitalism needs to sustain itself, it needs to have a relook at the financial co-existence with democracy.
Marxist critique of Capitalism
One cannot just overlook Marx. While Marx may have been wrong about the solutions, he brilliantly points out many of the loopholes of capitalism. Marxism has failed in multiple countries.
Capitalism did pull an enormous amount people out of poverty. However, there is an ever-rising inequality in the system. Marxists define capital as “a social, economic relation” between people (rather than between people and things)(Engels et al., 1995). In this sense, they seek to abolish capital. They believe that private ownership of the means of production enriches capitalists (owners of capital) at the expense of workers. In brief, they argue that the owners of the means of production exploit the workforce(Engels et al., 1995). According to few new Marxists, capitalism develops a violent uneven, and unstable society (Inequality and Poverty: A Marxist-Geographic Theory on JSTOR, Richard Peet, 1975). Around the world, there have been multiples unstable society that was formed because of exploitation. Currently, only 1% of the people own 90% of the wealth. Any system that has such a concentration of wealth is not sustainable according to Marxists. Marx identifies the workers are the dominant group of creating values in capitalism. He argued that they should have equal rights on the profit. All the narratives of capitals assume that market participants have a naive version of self-interest (that one’s self-interest is not connected to or does not consider the self-interests of others). Each such narrative also argues that morality is separate from (or even antithetical to) economic prosperity, and that competition for limited resources (value as a zero-sum game) is the dominant mode of prosperity(Freeman, Martin, and Parmar, 2007). The proponent of stakeholder capitalism believes that each narrative of capital is important and shift to stakeholder capitalism may solve few issues that Marx identifies.
Feminist Critique of Capitalism
Feminists have argued against the idea of western capitalism for a long time. In Feminist Theory the main contradiction in capitalism is not that between wage labour and capital but that between all labour. A capitalist economy is not understood by those who understand wage labour but by those who understand unpaid labour(Norene Pupo and Ann Duffy, 2012), especially modern domestic labour or otherwise housework. Feminists argue that the major contributing factor for the development of capitalist society is not the proletarianization but the housewifization of labour(Prügl, 1996). In the eyes of Feminists Capitalism is not about wage labour but the cheapest possible forms of commodity production. Feminists’ theories have argued that it is not the socialization of labour by free contract” that allows the devaluation of labour and life and hence the accumulation of more capital. It is labour’s and life’s naturalization and their transformation into a natural resource for exploitation (their natural resourcisation) that does so.
Capitalism has old and far-reaching patriarchal roots; capitalism is, in fact, patriarchy’s latest expression. In this sense, capitalism and patriarchy belong together. The differences lie in what is specific to capitalism: the extension of wage labour; the invention of unpaid housework (which is directly tied to the former)(THE DIALECTIC OF WOMEN’S OPPRESSION: NOTES ON THE RELATION BETWEEN CAPITALISM AND PATRIARCHY on JSTOR, 1982). The oppression of women preceded capitalism, but the latter has profoundly modified it. As more women are participating in the organised economy and the role of women are changing in society, the traditional form of capitalism will not sustain these changes. The initial success of equal rights movements of women will pave the way for long-term changes in 20th-century capitalism.
Whose Utopia is it anyway?
Another major problem of capitalism is disregard for the way of life of people. When capitalism vouch for growth it never stops and asks if the people asked for the growth. Steve Jobs has famously said, “the people don’t know what they want.” The future that 20th-century capitalism that was envisioned in the late 19th century is far to be achieved. Capitalism promised us innovation and heaven, however, it forgot to consider unintended consequences. Whose utopia are we co-opting?
Oxford has an average income of 2012 pounds. The village that I come from has 100 pounds. Oxford has 8 homeless people in its harshest winter. My village had none. Yet in many modern capitalistic metrics, Oxford will be considered more advanced. 20th-century capitalism is measured against a standard and utopia that has many fundamental gaps. Intersectionality and contextual utopia rarely show up in any vision statement of fortune 500 companies. As Michael Albert points out in his book realising hope that the major flaw of 20th-century capitalism is to think that it is race, gender, and culture blind(Realizing Hope: Life Beyond Capitalism — Michael Albert, 2014). When western societies try to integrate their version of capitalism into the rest of the world, it failed spectacularly. China, India, and many other developing countries are now trying to come up with a version of capitalism that is sustainable within the value system of their society. Radical movements like afro-futurism are trying to break out from the notion of western capitalist utopia.
Absurdist Critique of Capitalism: Why do we even need growth?
“You Are Not Special. You Are Not A Beautiful Or Unique Snowflake. You Are The Same Decaying Organic Matter As Everything Else.” -Fight Club
The entire idea of capitalism is that Capitalism promotes growth. Until Nietzsche disagrees. The idea that we need growth ascertains that there are certain values to the growth and life itself. Multiple postmodern philosophers have argued the exact opposite. They argue that there are no inherent values to growth and material wealth. It is mankind’s search for purpose that forces them to look for alternatives in the absence of real values. They argue that capitalism has increased alienation and creates a gap in man’s search for the purpose(School and Askenazi, 2014). This has been reflected in many of the Art forms. Whereas there were obvious celebrations of material prosperity in many art forms initially, there has always been a counterculture that asks why? The constant hijacking of our senses by 20th-century capitalism has made humans a product of the system. They argue that we have lost the freedom to think independently. Not a single philosophical theory exists that says this is helpful for society in the long run. One such example will be the depression pandemic across most prosperous societies. “Freedom is what we do with what is done to us.”― Jean-Paul Sartre
Conclusion
The world is still new and exciting. Thanks to capitalism and machine we are right now in a more consumer focus democracy than ever. If we take a step back and re-evaluate why capitalism? We will see that it exists only to help society progress. Multiple anthropological researchers have proposed that idea of money exists only in our collective imagination. Capital does not carry any inherent values to the system. Scientifically speaking, if we have enough resources and energy, we can create a system where we can entirely abolish the concept of capital. Elon Musk and few others are already proposing taxing the robots and universal basic income. With the advancement of science, data, and empathy we can envision a post-capitalistic world. We can create a world where we engage the communities. As Miyazaki argues in his book we can envision a world of hope(The Method of Hope: Anthropology, Philosophy, and Fijian Knowledge | Hirokazu Miyazaki, 2004).
According to Meadow’s famous 9 leverage points, the major leverage that needs to be done to make the capitalistic systems change is to mindset. The world we are living in is constantly arguing back and forth about the efficacy of capitalism. Dialogues are happening which is usually the first step for systems change. Major challenges in the leverage network are many of the leverage points are controlled by the 20th-century capitalist systems themselves.
“Our strategy should be not only to confront empire but to lay siege to it. To deprive it of oxygen. To shame it. To mock it. With our art, our music, our literature, our stubbornness, our joy, our brilliance, our sheer relentlessness — and our ability to tell our own stories. Stories that are different from the ones we’re being brainwashed to believe. Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.” Arundhati Roy (War Talks)
