(This article introduces author’s new book Capitalism: Why We Should Scrap It, 170 pages, available for free download at his site.)
This book provides a fairly short but detailed critical discussion of the nature of our basically capitalist economic system, its faults, why it is not just unsatisfactory but is leading to global breakdown, the alternative we must work for, and how to achieve it.
The book is written for ordinary people and especially for students. It is not a rant; it is a quiet and reasoned attempt to help thoughtful and concerned people to see why this economic system is deeply flawed and needs to be replaced.
Rich world per capita levels of production and consumption are now probably around ten times the levels that would enable a sustainable and just world. Yet a capitalist economy is a growth system; it must have continual increase in the amount of production, consumption and GDP. There is now a global Degrowth movement recognising that this is not just absurd, it is suicidal. It is generating all our major global problems, including resource depletion, environmental damage, resource wars, inequality, the deprivation of billions of people in the Third World, and stress, depression and loss of social cohesion in the rich countries.
Capitalism is also a system that allows market forces to determine what happens. It gives to the few who own most of the capital the freedom to pursue maximum profits in the market place. What industries are developed and what goods are produced will always be those which most enriches them. But market forces always attend primarily to the demand of the richest and ignore the needs of the rest of us. The industries set up are those that will make most profit, not those most needed, and products will go to richer people because they can pay more for them. This explains most that is wrong with the world.
An inevitable result is ever-increasing inequality. Another is the increasing power of the capital owning class to get governments to do what is best for capital. The top priority of governments is to “get the economy going”, which means helping capital to do more good business.
The first chapters detail these and many other issues, illustrating effects mostly by reference to evidence from the Australian economy but the implications apply to the global situation. Chapter 4 discusses impacts on the quality of life. We work far too hard, we have to struggle to cope, we are insecure, and are obliged to compete as isolated individuals. Good values such as cooperation and caring are driven out, and social bonds are weakened. It is no surprise that depression is now probably our greatest health problem.
Chapter 6 outlines the situation capitalism has developed the Third World into, having geared its economies to rich-world benefit. Impossible levels of debt enable the IMF to force poor countries to increase freedom of access by rich world corporations and banks, on the pretexts that this will “… get the economy going” and then “… there will be trickle down of wealth”. The country’s labour and resources are devoted to exporting, debt repayments leave governments unable to assist the poor, countries must compete against each other to export commodities, which keeps prices low for rich countries etc. Trillions of dollars in wealth are transferred from poor countries to rich every year, mainly due to the very low wages producing our imports. This is the result when the form of development envisaged is only capitalist development, not development of what people need. They are trapped in the capitalist system whereby development is a process of legitimate looting.
Chapter 7 documents the appalling situation the USA is in, being around the bottom of the list of rich countries on just about all indices of social welfare and quality of life. This is because the country has been stolen by the capitalist class. As Warren Buffet said, “It’s class war — and my class won.”
Chapter 8 argues that capitalism is inevitably and unavoidably leading us towards catastrophic breakdown of global economic, bio-physical and social systems. Many analysts are now saying this. The mountain of debt alone, due to the recent advent of financialisation, indicates this outcome, but there are several other causal factors, including increasing scarcity of resources, resource conflicts, rising costs of living and industry inputs, and ecological damage. Above all there is the rising anger and confusion of deprived masses fuelling dissent, rebellion and support for authoritarian governments and fascism.
These consequences and trajectories cannot be avoided or remedied. Capitalism cannot be reformed to not cause them. They are direct effects of a socio-economic system which allows its directions to be determine by the drive of the few who own most of the capital to make as much money as they can. Why would such an arrangement be expected to work out well for all people? But capitalist ideology is so powerful that it prevents critical awareness of the situation.
It is argued in Chapter 8 that this society is incapable of solving the big problems and that the coming time of great troubles cannot be avoided. The problems are too big and wicked, there is too little time left, the capitalist class is too deeply entrenched, elites and governments are convinced that more growth is the solution, and very few understand what the basic cause of the predicament is to do with the over-consumption and immiseration the capitalist economy generates. How then might we replace capitalism? The last chapter offers an answer.
Chapter 9 provides a critique of conventional economic theory, and the economists who practise and teach it.
This analysis of the nature of capitalism leaves only one general form that a sustainable and just society can take. You will probably be delighted to know that it is not Socialism. You might be surprised to learn that it must be (a form of) Anarchism.
Chapter 10 argues that those resource consumption levels and the ecological damage can only be reduced sufficiently, and those social problems can only be eliminated, by transition to what is called The Simpler Way. This involves mostly small, highly self-sufficient and self-governing cooperative communities controlling their local economies and embracing much more simple lifestyles and systems. Towns and suburbs would focus on running their local supply, production and maintenance systems via committees, town meetings and working bees, within economies that they control, that have no growth, and that are driven by need not market forces or profit. There could still be (small) cities, and private ownership of small family firms and farms (under strict social guidelines.) There could be an increase in things like universities, high-tech medicine and socially-useful R and D.
This vision differs from the standard Socialist image of post-capitalist society, primarily in not involving strong centralisation or a major role for a powerful state. It is about communities taking control of their own local affairs via highly participatory self-government involving conscientious citizens contributing to town meetings, committees and working bees. This is an Anarchist vision, focused on cooperation, participation, inclusiveness, eliminating domination and prioritising the welfare of all. There will still be functions best coordinated centrally but all policy decisions would be finalised at the level of town government.
These ways would be easily achieved …if we wanted to do that, and they would enable much higher quality of life than most people in rich countries have now. You might need to work for money only two days a week. You would be secure in a supportive, cooperative and caring community that is keenly aware that everyone’s welfare depends on how well the town looks after its citizens and its systems. Many in Eco-village and Transition Towns movements now do live in ways like this and enjoy secure high quality lives. There is a rapidly increasing recognition that this the sensible way for humankind to go, and many around the world are building these kinds of systems; e.g. the Rojavan Kurds, the Spanish Catalan Integral Cooperative, the Zapatistas, and in the Ubuntu, Satyagraha and Campesino movements.
The final chapter considers how the transition might be made. Reforms such as those proposed by Green New Deal advocates cannot solve the problems. The necessary changes go beyond replacing the capitalist economy; they must involve huge changes in settlement patterns, political systems and above all in culture, that is in ideas, values and dispositions. The primary factor must be willing acceptance of materially simple lifestyles and systems.
Socialist strategies cannot achieve the required alternative, which cannot involve centralised control and cannot be implemented by capturing the state. This revolution must be essentially a cultural revolution, driven by willing acceptance of radically new ideas and values contradicting those fuelling capitalist society.
Our present society is incapable of making the transition deliberately and rationally through its parliamentary and other institutions. Capitalism and obsession with affluence and growth are so deeply entrenched that we are locked into descent to a possibly terminal time of great troubles. This will see capitalism’s contradictions bring about its self-destruction and this could terminate civilisation, along with the lives of billions. But it will also enable the emergence of more sustainable and just ways and it will push people in this direction as their circumstances deteriorate.
The final section of the book argues that the best way to contribute to the transition is, as the Anarchists say, to prefigure the new ways that are to replace capitalism. That is, it is to create here and now some of the alternative systems and processes that we want to be the norm in the new society. This is very different to the Socialist’s strategy which is to work to take state power. But the state cannot implement The Simpler Way, that is, set up and run huge numbers of small self-sufficient and self-governing communities. More importantly there cannot be movement towards establishing them unless there has first been adoption of the associated ideas and values. The cultural change is the crucial factor, and prefiguring is the best way to introduce and spread the understandings that a) capitalism must be scrapped and b) the alternative must be mainly local, self-sufficient, self-governing, cooperative and frugal communities. But just establishing more gardens, coops or whole communities is of little value unless they are used as devices for raising awareness of these two big themes.
This approach holds open the possibility that the transition could be peaceful, and that aspects of the new society can be enjoyed here and now as we contribute to its emergence. Only if this Stage 1 cultural change goal is achieved can we go on to make the structural changes also required for a sustainable and just post-capitalist society. If the new ideas become widespread then the big structural changes will be easy, and the cultural change will be seen as having been the revolution.