The Case against Capitalism (And the Alternatives)
When it comes to business operations, I advocate for Non-Capitalist Economic models which I would summarize as the following: Cooperatives and horizontal human relationships based on mutual benefit instead of Capitalism, Hierarchy, and human relationships based on Bargaining Power.
In other words, workplace democratization and autonomy instead of a workforce oligarchy.
The following article will be relentlessly Anti-Capitalism. However, I’d like to start off by giving Capitalism credit where it’s due.
At some point, Capitalism was a step forward for humanity; especially when compared to Feudalism and Slavery. The reasons for this are largely due to decentralization.
Decentralization ideally suggests more innovative space and freedom alongside lower risks that would typically be present in centralized systems.
Just as businesses have extremely high rates of failure, running massive nations under strictly top-down arrangements is both risky and despotic.
In the spirit of this progress, this article seeks to explore alternatives to Capitalism, especially in regards to the short-comings that still hold true to its more oligarchic predecessors.
Why criticize Capitalism at all? Everything we own has been produced by Capitalism.
Capitalism is merely the dominant model of the world in this modern-day and age, just as feudalism was prior to Capitalism. In other words, “The assumption that what currently exists must necessarily exist is the acid that corrodes all visionary thinking” — Murray Bookchin
“isms” do not produce anything, labor does. “ism” represent the order in which value (produced by labor) is distributed.
On Capitalism (Workplace Oligarchy)
Capitalism is a non-laboring method to extract value from those who put in the labor. It is conducted in the form of rent, interest and tax (this point will be explained).
In short, it is a Triangle Model that is set to accumulate wealth to the top (The central planners) by the labor and time of the workers at the bottom (The workers).
Land-ownership is the most blatant case of Capitalism’s functions.
A landlord has ownership over land and its natural resources by limiting those who surround it from access to those resources.
Land and natural resources are still core components of the global market (And our daily needs), and wherever natural resources aren’t nationalized or worker-owned, they are privately owned by domestic or multi-national capitalist enterprises.
This is an ordeal that is mandated by state-backed laws (Therefore, armed forces — Public or private).
Due to this arrangement, a landlord is capable of demanding a cut of the profit produced by workers and residents who add value to the land, with their labor.
To that effect; Land-ownership is a non-laboring method to tax workers off the profit produced by their labor, which is then used to expand on the privatization of land and taxation of more workers.
All forms of Capitalism are ultimately linked back to Land-ownership. Just as value is extracted in currency notes (rent), it is extracted in time and labor as well.
The dynamic where profit is accumulated through non-laboring “ownership” of land, is also reflected in the accumulation of profit through the ownership of other workers’ labor.
In practice, Capitalism imposes non-laboring (or under-laboring) lordship over the labor of other people.
By design, those who follow this model seek to profit off workers’ time/labor as much as legally and physically possible, while leaving the worker with as little of their own labor/time’s value in return (Salaries).
That is how a business owner generates profit within the Capitalist model, and compete with other Capitalists. The employers who push this line the most, compete the best (At the expense of the workers.).
In practice, it is actually the largest form of taxation — one that is off most of the workers’ time and labor.
The overall outcome of this trend is that the world’s 8 richest people have the same wealth as the poorest 50%.
The gap keeps widening, as wealth is not meant to Trickle-down. This goes precisely against the agenda of the Capitalist business owners, which is the accumulation of wealth. By the book — wealth is meant to pump upwards, and as little as possible going downwards.
Competition between Capitalists is largely determined by how well they can push that line, either to thrive or to merely stay afloat. It is precisely why without resistance, Workers had 12-hour work shifts (“Voluntarily”) and kept less than 1% of what their labor was initially worth (“Voluntarily”). They continue to do so in many parts of the world today.
Capitalism actively seeks out the lowest bidders. This traps the working-class into conditions where they also compete over who bids the lowest, which is how the line is perpetually pushed.Without low bidders, Capitalists would struggle to make a profit and compete.
In addition to this. The end products are sold for far more than their value back to the workers, while they simultaneously receive far less than their initial labor’s value, Doubly benefiting the Capitalists. Further disadvantaging those who put in the labor, making it relatively impossible for the working-class to work out of poverty.
As long as Capitalism is the dominant business model, workers will always be on the bottom end of the negotiating table. Agreements overwhelmingly benefit the Capitalists over the vast majority of the human population. One side has an advantage (and a monopoly) over power and choice, while another must inevitably sign a paper in order to meet their basic needs of survival.
The more desperate the workers are, the more capable the Capitalist is at exploiting their desperation, and they often choose to. This is precisely why Capitalists often off-shore their production to impoverished southeast Asian countries.
Meanwhile, the workers (Vast majority of the human population) indulge themselves in the scraps left off by the Capitalists. All of which is initially off their time and labor to start with.
Responses to Right-Wing Libertarianism
“But it’s consent. They signed a contract. A Mutual agreement”
Many advocates of Free-Market Capitalism take serious issue with Government taxation on the basis that it is a police-backed theft of the value produced by the work of others.
While simultaneously making an exception for landlords, shareholders and bankers in their Police-backed (Private-Militia backed) extraction of wealth produced by laborers, and accumulated by non-laborers.
Had the government responded to your labor with the following; “Farming? Trade? Where you are is due to my grace, so I’m entitled to a cut”.
Free-Market Capitalists would typically oppose such an arrangement (Rightfully so) while still making an exception for the landlords and bankers who comes forth with the same exact demand.
They may respond with the following: “The State makes money through taxation, which is organized theft. Therefore, the state is conceptually different from an individual, or any free organization.” Free-Marketeers often see those patterns when it comes to the state. Yet, they miss the mark when it comes to Capitalism. By that argument, critics of Capitalism can state the following:
1. The accumulation of profit through land ownership (Rent) is also organized theft.2. Therefore, Capitalists are conceptually different from an individual, or any free organization.
Workers may voluntarily decide to associate with either Capitalists or the state, and it is their freedom to so. This doesn’t neglect the fact that both the state/capitalists (Landowners, in this case) have non-negotiable authority over their decisions, to begin with.
They are voluntary decisions made within chronically limited circumstances, perpetuated by the State, and Capitalists from the start.
If a state extends its power of taking tax (theft) by also charging interest on loans, then they’d be further expanding on their theft from the workers. In this case, they’d be charging to “Distribute Capital” they stole in the first place. If tax was theft, then interest would be a ransom.
In that scenario alone: The state is technically “Distributing Capital” without actually adding anything of value, but the contrary.
Therefore, their functions are fundamentally different from those of laborers and managers.
It is a hierarchical force that exists above both, and it seeks to extort value from their labor.
The same also applies to Capitalists who accumulate their profit by taking rent (also theft), and then use the profit which they extorted to distribute loans that they would charge interest over.
In this case, they are also charging to “Distribute Capital” they stole in the first place. Rent was theft, and interest would be ransom as well.
They are technically “Distributing Capital” without actually adding anything of value, but the contrary.
Therefore, their functions are fundamentally different from those of laborers and managers as well.
It is a hierarchical force that exists above both, and it also seeks to extort value from their labor. If the state continues to expand on its theft/ransom (Tax and interest) by having “Ownership over the means of production”, they’d be practically placing a tax on the workers’ own labor. The so-called “Ownership” the state has over production would be a non-laboring extortion of the workers’ labor, be it manual or managerial.
In this case, the same applies to Capitalists when they use theft/ransom (Rent and interest) to “Own production”, which would practically be a tax on the workers’ own labor as well.
The so-called “Ownership” the Capitalists have over a factory, land or natural resources would also be non-laboring extortion of the workers’ labor, be it manual or managerial. If a free-market Capitalist intends to justify the accumulation of wealth through the privatization of land, its natural resources and the labor (of other people) that occurred within a natural space, then they’d be simultaneously justifying the accumulation of wealth by the centralized state (State Socialism / Capitalism).
The difference is the one is called “tax”, and the other is called “rent”.
One allegedly exists for egalitarian purposes, while the other is transparent about its pure profiteering purposes.
One justifies its accumulation due to “democratic centralism and the people’s party”, while the other justifies its accumulation due to “voluntary agreements” between a handful of people (landowners), with no say from the vast majority of those affected by their decisions.
The bottom line is that “Free Market Capitalism”, like State Socialism, doesn’t exist in a vacuum. It exists at the expense of other voluntary associations.
It’s an arrangement where one force projects itself over others. Over land, labor, and natural resources.
Therefore, to suggest that measures to resist (defend oneself) from such an arrangement is “anti-freedom” would be contradictory.
It is justifiable to take defensive measures against Capitalism, in the same exact sense a Free-market Capitalist would also suggest that it is “justifiable to take defensive measures against State Socialism”.
Adam Smith’s criticism of landlordship
The earliest criticisms of landlordship come from none other than Adam Smith himself.
- The rent of the land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give. “
— ch 11, wealth of nations
- “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.”
- “[the landlord leaves the worker] with the smallest share with which the tenant can content himself without being a loser, and the landlord seldom means to leave him any more.”
— ch 11, wealth of nations.
- “The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own. “
— ch 11, wealth of nations.
“RENT, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances. In adjusting the lease, the landlord endeavours to leave him no greater share of the produce than what is sufficient to keep up the stock”
— ch 11, wealth of nations.
- “[Landlords] are the only one of the three orders whose revenue costs them neither labour nor care, but comes to them, as it were, of its own accord, and independent of any plan or project of their own. That indolence, which is the natural effect of the ease and security of their situation, renders them too often, not only ignorant, but incapable of that application of mind”
— ch 11, wealth of nations.
- “[Kelp] was never augmented by human industry. The landlord, however, whose estate is bounded by a kelp shore of this kind, demands a rent for it”
— ch 11, wealth of nations
“every improvement in the circumstances of the society tends… to raise the real rent of land.”
Capitalism is out of touch with consent
First off. What is Consent?
Consent is when one party gives another party permission to engage in specific activities together.
Consent is to agree to something. The conditions of giving consent could derive from a place of passion and desire, while it could also derive from a place of necessity and desperation. The outcomes could range to satisfaction fulfillment, substance abuse and the desire to kill oneself. There are different conditions that determine these outcomes.
Second point. What is Abuse?
Abuse is when a person is treated in a way they do not wish to be treated. Abuse often benefits the abuser at the expense of the abused. Therefore, abuse is inherently unjust.
Right-Wing Libertarians often assume that “Consent” cancels out “Abuse”. When in fact,
Consent + Abuse = Exploitation.
In other words, workers may have consented to how they respond to exploitation, but they have not consented to the decisions imposed upon them without their say.
That distinction is very important. Here is a scenario that differentiate Consent from Exploitation:
Consent: Two individuals agree to provide protection for another on mutual benefit.
Exploitation: During desperate times, one individual seeks another individual for protection. The second individual sees the desperation in the individual who’s pleading for help. Thus, offers to only provide support in the exchange of certain “services” that are deeply difficult and painful for the desperate individual. The dominant individual, aware he has the negotiating powers over the weaker individual in this situation, deliberately decides to squeeze the situation to his advantage as much as he possibly could. At the expense of the desire and feelings of the weaker individual. The dominant party is acting on Exploitation.
The latter being a scenario with the undertone of prison rape.
Alternatives (Democratization & Autonomy)
In short, the alternative would consist of the following:
1. Workers cooperatives instead of Capitalist enterprises.
2. Credit unions instead of private banks.
3. Collective ownership of land and natural resources instead of private landlordship.
This falls under an ideology referred to as Libertarian Socialism.
Libertarianism has referred to Libertarian Socialism since the 1800s in France, until “Right-Wing Libertarianism” was only coined in the United States in the 1970s. Libertarian Socialism predates Marxist-Leninism, Maoism, and other State Socialist ideologies.
The latter refers to “State ownership of the means of production”, most notably as a “Dictatorship of the proletariat”. Libertarianism refers to Workers autonomy from both the state and Capitalists.
Revolutionary Catalonia was one of the primary example of a Libertarian Socialist model. George Orwell (Who is not in favor of authoritarian State Socialism, and perhaps one of the most notable critics of State Socialism in the Western World) described it his experiences on Revolutionary Catalonia as the following (Quoted from “Homage to Catalonia”):
“Yet so far as one could judge the people were contented and hopeful. There was no unemployment, and the price of living was still extremely low; you saw very few conspicuously destitute people, and no beggars except the gypsies. Above all, there was a belief in the revolution and the future, a feeling of having suddenly emerged into an era of equality and freedom. Human beings were trying to behave as human beings and not as cogs in the capitalist machine. In the barbers’ shops were Anarchist notices (the barbers were mostly Anarchists) solemnly explaining that barbers were no longer slaves. In the streets were colored posters appealing to prostitutes to stop being prostitutes.”
“Many of the normal motives of the civilized life -snobbishness, money-grubbing, fear of the boss, ect – had simply ceased to exist. The ordinary class-division of society had disappeared to an extent that is almost unthinkable in the money tainted air of England. There was no one there except the peasant and ourselves, and no one owned anyone as his masters”.
“In practice, the democratic ‘revolutionary’ type of discipline is more reliable than might be expected. In a workers’ army discipline is theoretically voluntary. It is based on class-loyalty, whereas the discipline of a bourgeois conscript army is based ultimately on fear…In the militias the bullying and abuse that go on in an ordinary army would never have been tolerated for a moment.”
There’s a strong point where the interests of Libertarian Socialists are in direct correlation with advocates of Free-Market Capitalism. One many overlook, and it’s that most people wish to eventually run their own workplace. Or rather, most of the human population want to run their own businesses.
That’s because workers, as well as capitalists, understand that workers’ conditions are less than tolerable, and self-ownership is often the more appealing alternative. With Capitalism being the status quo, this is impossible for this to occur for the vast majority of the human population. Capitalists require a vast working-class population to labor for their businesses in order to compete with other Capitalists, while the position of property ownership remains reserved for a few.
The only scenario where the vast majority of workers would be able to own, run, and operate their own workplace is one where they collectively co-own their businesses.
“Ownership over the means of production” is the preferable motto for many of those who suggest alternatives. A more simpler expression would be workplace democratization. In other words, Self-ownership and possession over one’s own time and labor. Either individually, as a voluntary cooperative or a community.
Workplace democratization can also be referred to as the cooperative model. Cooperatives refers to a worker-owned business model. They already exist. Some since last decade such as “Green Worker Cooperatives” in the US. Others from over a century, such Wooldale Co-operative Society in the UK (since 1886). Other examples of Cooperatives include the following; Mondragon Co-operative Corporation, since 1956. International Co-operative Alliance, since 1895. Highburton Co-operative Society, since 1857. Shepley Co-operative Society, since 1852.
In Emilia Romagna, around 40% of the GDP is produced by Cooperatives. It’s also the region with the fourth strongest economy in Italy.
“Active people in working age are more than 70%, and the women activity rate is the highest in Italy. The unemployment rate is under 8% in 2015 with respect to the national average (12.8%).”
In a co-operative run economy, the minimal differences in equality are due to the differences in the amount of time and labor each worker puts in. Under Capitalism, inequality is not a byproduct of labor, but the outcome of a non-laboring class with State-backed monopolies over land and resources, along the legal power to extract (landlordship, tool-use rent, shareholders) of up to 60–90% of the wealth produced by those who put in the labor.
These forms of co-operatives are referred to as Cooperative Individualism, while Cooperative Federalism refers to services that are owned by its users and consumers, such as Credit Unions, which are consumer-owned banks that are managed by their own members.
Credit unions earned a score of 80 versus 75.2 for banks in Forbes’, alongside a satisfaction rate of 4.42 out of 5, compared to 4.24 for banks.
A Capitalist Business is run like a workplace oligarchy where Workers cannot make decisions in a democratic process, nor decide on how to spend and divide the value of their surplus based on their time/labor, and finally — must hand an overwhelming majority of their surplus to a Hierarchical structure. This is where Capitalism has the undertones of taxation and statism.
Capitalism is a system that derives from, empowers, and runs upon the extraction of value off the labor of others.
Taking into note that this doesn’t apply to free-market secularly.
Capitalism is a uniquely exploitative business model, and Libertarian Socialists typically call for ending exploitation by the decentralization of business along with Workers’ ownership over their means of production.
Whether collectively, or in non-hierarchical business models such as Syndicalism, Mutualism and “Left-Wing Freed Market”.
These alternatives will potentially lift the Working-class out of poverty, whereas Capitalism will further increase the gap between the world’s wealthiest and the majority of the working-class population. Pushing workers’ into further poverty and effectively resulting in further desperation, therefore — further exploitation (Competition puts pressure for all Capitalists to follow suit).
Such conditions empower Capitalists with the ability to extract more of the labor of the workers while providing even less of the surplus.
This will progressively empower the Capitalists with a bigger monopoly over production, held by a few at the expense of the vast majority of workers and the human population.
By Khaleeji Syndicate