Let’s face it.
Unless you’re part of a small minority of the world’s population, capitalism is the problem.
I know…..you’ve been told your whole life that capitalism is the best economic system in the world.
But you’ve been told that by either people that don’t understand capitalism or by the small number of people who reap the benefits of a capitalistic economy…..The Capitalists.
It’s time to shed some light on this system, and expose it for what it actually is…..a parasitic economic system that, like all parasites, will ultimately devour its host, which includes the Earth’s resources and the vast majority of people on the Earth.
Markets plus Free Enterprise?
“Most business leaders, mass media, politicians and academics keep defining capitalism, the main economic system in today’s world, as markets plus private (“free”) enterprises. That definition is wrong. Definitions matter more now than ever as people increasingly question, challenge and want to move beyond capitalism.
Consider the 20th century revolutions that overthrew a capitalism they defined as markets plus free enterprises. In Russia and China, they replaced private, free enterprises with socialized (state-owned-and-operated) enterprises and replaced market mechanisms of distribution with central state-planned distribution. They called that “socialism,” thinking they had abolished and gone beyond capitalism. However, their socialism proved unable to sustain itself and mostly reverted back to capitalism.
One reason those revolutions failed to go beyond capitalism was those revolutionaries’ definition of capitalism and socialism. That definition crucially shaped their strategies for and very conceptions of revolutionary social change. Since that definition still shapes debates over and strategies for social change today, it urgently needs to be criticized and set aside.
A Market System?
Because capitalism is so regularly defined as “a market system,” we may consider first the actual non-equivalence of capitalism and markets.
Capitalism became the dominant economic system in England in revolt against feudalism there in the 17th century. Capitalism spread from England to the western European mainland and thereafter to the rest of the world. However, capitalism was neither the first nor the only system to utilize markets as its means of distributing resources and products.
In the slave economic systems that prevailed in various times and places across human history, markets were often the means of distributing resources (including slaves themselves) and the products of slaves’ labor. In the pre Civil War United States, for example, masters sold slaves and cotton produced by slaves in markets.
Thus, the presence of a “market system” does not distinguish capitalism from a slave system.
So…..Whatever distinguishes capitalism from such other systems as slavery and feudalism, markets and free enterprises are not it.
Feudalism and Markets
The same logic applies to feudalism. In many times and places across European feudalism, for example, products of feudal enterprises (called “manors”) were sold in markets to serfs and lords of other manors. During the 20th century, for example, feudal latifundias in Latin America sold their products on world markets. The presence of a “market system” does not distinguish capitalism from feudalism. Even the presence of a particular market – e.g., for wage labor – is no definite marker of capitalism’s presence. Economic history displays various examples of slaves and serfs having some or all of their labor power exchanged in markets for money or other commodities.
Likewise, capitalism has persisted when markets were subordinated to other mechanisms of distribution. For example, during World War 2, ration cards distributed by the US government fundamentally displaced the market system for distributing many goods. Capitalism also can and has coexisted with “unfree” enterprises. In August, 1971, President Nixon took away the freedom of capitalist enterprises to set prices or wages. Capitalism elsewhere has often continued despite markets and enterprise freedoms being variously abrogated or suppressed for differing lengths of time.
What About Competition?
Whatever distinguishes capitalism from such other systems as slavery and feudalism, markets and free enterprises are not it. Nor will competition or the extent of government intervention serve to differentiate capitalism from other systems. The competition among capitalist enterprises had its parallels in competitions among slave plantations, feudal manors, feudal guild workers and so on. Competition varies in its forms and intensities among capitalist enterprises depending on the context and conditions of each industry across time and space. The same is true for competition among non-capitalist enterprises.
Finally, government intervention into an otherwise “private” sector of the economy has also been a variable feature of all economic systems. In some slave systems, slaves were chiefly privately owned, while in others, states owned and worked many slaves. In Europe, the absolute monarchies toward the end of feudalism were states owning huge numbers of subordinated serfs alongside the privately run feudal manors of such kings’ subjects. Shifting constellations of private versus state production units characterize non-capitalist as well as capitalist systems.
Production, Appropriation and Distribution of Surplus
So then how should we define capitalism to differentiate it from alternative economic systems such as slavery, feudalism and a post-capitalist socialism? The answer is “in terms of the organization of the surplus.” How an economic system organizes the production, appropriation and distribution of its surplus/profit, neatly and clearly differentiates capitalism from other systems.
In slavery, one group of persons, the slaves that are others’ property, performs the basic productive labor. Slaves use their brains and muscles to transform objects in nature into what masters desire. Masters immediately appropriate their slaves’ total output, but they usually return a portion of that output for the slaves’ consumption. The excess of the slaves’ total output over what they get to consume (plus what replaces inputs used up in production) is the surplus/profit. The masters take that surplus and generally distribute it to others in society (e.g., police and army, church, etc.) who provide the conditions (security, belief systems, etc.) needed for this slave organization of the surplus to persist through time.
Feudalism displays a different organization of the surplus. Serfs are not property as slaves are; lords do not immediately and totally appropriate what serfs produce. Instead, serfs and lords enter into personal relationships entailing mutual obligations (in European feudalism: fealty, vassalage, etc.).
In medieval Europe, lords assigned land parcels to serfs, whose labor there yielded outputs. Feudal obligations typically included either 1) serfs’ laboring parts of each week on their assigned plots and keeping the proceeds and laboring other parts of the week on the lord’s retained land, with the lord keeping the product of that labor (“corvée”); or 2) the serf delivering to the lord as “rent” a portion of the product (or its monetary equivalent) from the land assigned to and worked by the serf. Corvée and rent were forms of Europe’s feudal surplus.
Capitalism’s organization of the surplus/profit differs from both slavery’s and feudalism’s. The surplus producers in capitalism are neither property (slavery), nor bound by personal relationships (feudal mutual obligations). Instead, the producers in capitalism enter “voluntarily” into contracts with the possessors of material means of production (land and capital). The contracts, usually in money terms, specify 1) how much will be paid by the possessors to buy/employ the producer’s labor power, and 2) the conditions of the producers’ actual labor processes. The contract’s goal is for the producers’ labor to add more value during production than the value paid to the producer. That excess of value added by worker over value paid to worker is the capitalist form of the surplus, or surplus value.
While the capitalist, feudal and slave organizations of the surplus differ as described above, they also share one crucial feature. In each system, the individuals who produce surpluses are not identical to the individuals who appropriate and then distribute those surpluses. Each system shares a basic alienation – of producers from their products – located at the core of production. That alienation provokes parallel class struggles: slaves versus masters, serfs versus lords, and workers versus capitalists/employers.
Marx used the word “exploitation” to focus analytical attention on what capitalism shared with feudalism and slavery, something that capitalist revolutions against slavery and feudalism never overcame.”(1)
In other words, what capitalism shares with slavery and feudalism is that all three are parasitic systems, with capitalism utilizing the most deceptive veneer of freedom.
“The concept of exploitation serves also to differentiate socialism clearly from capitalism, feudalism and slavery. In a socialism defined in terms of surplus organization, the producers and the appropriators/distributors of the surplus are identical; they are the same people. In such socialist enterprises, the workers collectively appropriate and distribute the surplus they produce. They perform functions parallel to those of boards of directors in capitalist corporations. Such “workers’ self-directed enterprises” (WSDEs) are unlike slave, feudal and/or capitalist enterprises. WSDEs represent the end of exploitation/parasitism.
Under Soviet Socialism
Significant conclusions follow. Soviet socialism from 1917 to 1989 did displace private in favor of social ownership of means of production and markets in favor of central planning. It did not displace the capitalist organization of the surplus in favor of WSDEs; surplus producers and appropriators in state enterprises were not made identical.
Workers produced and others – the USSR’s Council of Ministers and their appointed state officials – appropriated and distributed surpluses generated in state industrial enterprises and on state farms. The Soviet definition of socialism did not focus on the organization of the surplus. Most socialists over the last century, pro- and anti-Soviet alike, used the same definition. In the 19th century, Marx and Engels saw the seizure of state power as a means to transition from capitalism to socialism. In the 20th century, state ownership of the means of production and state central planning became the definition of socialism itself: the end, not just the means. That problematic definition of capitalism and its difference from socialism remains prevalent to this day.
The 20th century’s major experiments to establish socialism would have ended differently had organizers defined capitalism and socialism differently. Their policies might then have replaced not only private with social property and markets with central planning, but also exploitative with nonexploitative organizations of the surplus. As ground-level organizations, WSDEs might have secured a democratic accountability of socialist governments and thereby the survival and development of socialist economies.
The surplus-focused definitions of capitalism and socialism are available to social movements today as they engage and contest economic systems. Or those movements can stay enmeshed in old, endlessly recycled debates between more (Keynesian and welfare statist) versus less (neoliberal) government intervention in capitalist economies. Will the movements keep limiting their goals to expanded government regulation of, and intervention in, economic systems where capitalist organizations of the surplus continue to prevail?
Or will social movements – increasingly facing a hostile global capitalism – seek alliances with advocates of system change via establishing enterprise democracy through WSDEs? Such political questions become urgent as more people than ever question capitalist globalization and capitalism generally.
Cooperatives of all kinds, including worker cooperatives, have a long complex history. In many parts of the world today, they have carved out an acceptable – on condition of remaining a relatively small – place in otherwise capitalist economies. They rarely confront capitalism as an alternative economic system, likely fearing capitalism’s probable reaction.
Confrontation – putting WSDEs forward as a systemic alternative to capitalism – could take may forms. For example, labor unions could add the establishment of worker coops to their strategies vis-à-vis capital. When employers demand concessions by threatening to close enterprises, move them abroad, etc., unions could refuse and proceed instead to establish workers coops if and when the employers actually abandon enterprises. To take another example, localities could campaign for use of eminent domain to address both unemployment and poverty by organizing and supporting worker coops. The successful Mondragon Cooperative Corporation was born in a poor and unemployment-ravaged part of 1950s Spain. High school, college and university curricula could include both abstract discussions on how the US might do better than capitalism and practical courses for establishing worker coops.
Most important would be if progressive political forces saw gains from allying with, helping to build, and undertaking mass political and ideological support for worker coops. The latter could then provide a crucial communication bridge between the left and the daily struggles of workers in their enterprises, both those still capitalist and those that are WSDEs or becoming so. Workers already in WSDEs and those working for transition to WSDEs could also provide economic and political supports to left political initiatives and campaigns. In return, the left could mobilize for legal and other changes to provide worker coops with the needed legislative framework, capital and markets. Mass political campaigns eventually secured the Small Business Administration for small businesses and various levels of political supports for minority and women-owned businesses. WSDEs could benefit from parallel administrations assisting them.
Eventually, when WSDEs had become widespread enough and an allied left had grown enough, they jointly could offer the American people a real choice never before available. They might choose an economy based on capitalist, top-down hierarchical enterprise organization or one based on WSDEs, or some mixture of both.”(1)
Top 10 Reasons to Hate Capitalism
- “Capitalist corporations suffer from a personality disorder characterized by enduring antisocial behavior, diminished empathy and remorse, and are rewarded by shareholders for acting that way. If corporations could be sent to a criminal psychologist’s office they’d be diagnosed as psychopaths and locked away forever.
- Capitalism encourages greed. But greed is only good for capitalists. For normal people it is anti-social and soul destroying, not to mention very bad for our communities, which rely on altruism, compassion and a generalized concern for others.
- Capitalism is a system of minority privilege and class rule based on the private ownership of means of livelihood. This gives a few rich people the power to buy and sell jobs, which means they can build or destroy entire communities that depend on those jobs.
- Capitalists praise freedom and individualism, but they destroy freedom and individualism for everyone but themselves. The vast majority of us who work for a living are daily asked to uncritically follow orders, to act as if we are machines, and limit our creativity to what profits our bosses.
- Capitalists denigrate cooperation and collectivism, but create mass production processes that rely on both from workers. Their system requires us to be cogs in a giant profit-making machine, but because they fear the power this gives us we are told working together for our own interests is illegitimate and bad. Thus capitalists undermine unions and other organizations that encourage workers to cooperate with each other and act collectively.
- Capitalism requires the largest propaganda system the world has ever known to convince us it is the only system possible. It turns people into consumers through advertising, marketing, entertainment and even so-called news. Millions around the world are employed to use their creativity to twist our feelings of love, desire, human solidarity and fairness into tools of manipulation, so that ever more profits can flow into the hands of a tiny minority.
- Capitalism is a system in which the principle of one dollar, one vote, dominates that of one person, one vote. Those who own the most shares (bought with their dollars) control giant corporations, many of which are more powerful than all but a few governments. Rich people also use their money to dominate the elections that are supposed to give us all one, equal vote. Under capitalism those with the most money are entitled to the most goods and services as well as the most say in directing our governments and our economy.
- Capitalism proclaims the virtue of naked self-interest, but self-interest without regard for morality, ecology or common sense leads to environmental degradation, destruction of indigenous communities, colonialism, war and other forms of mass destruction. Self-interest leads capitalists to seek profit absolutely everywhere, regardless of the damage done to other people and the health of the planet’s ecosystem. Self-interest leads capitalists to destroy any rival economic system or way of thinking (such as indigenous communal land use and respect for nature) that can be a barrier to their endless quest for profit.
- Capitalism is not a friend to democracy but ultimately its enemy. When pushed, capitalists choose capitalism over democracy. If people use democracy to weaken the power of capitalists the rich and powerful turn to various forms of fascism in order to keep their privileges.
- Capitalism is a cancer taking over our planet. Capitalists make profits from global warming, from destroying our oceans, from pumping ever more chemicals into the atmosphere and from patenting everything they can, including life itself. Only by getting rid of capitalism can we rescue our environment.”(2)
“Capitalists as individuals may or may not be obsessively greedy, but the system of competitive capitalist entitlement compels them to maximize profits. Capital with higher returns gains value; capital with lower returns loses value. Enterprises losing relative value are threatened by takeover, or being broken up and sold off in pieces, or being forced into bankruptcy.
Competition to maximize profits explains why capitalist enterprises cut employment and wages with little or no regard for the effect on working people. It explains why corporations and the wealthy campaign to cut the taxes they pay, and demand cuts to public services and public employment.
The competitive drive to maximize profits and the private ownership of social means of livelihood are at the root of recurring booms and busts. Real capitalism (as opposed to theoretical) is inherently unstable.
Individual enterprises can increase profits by cutting employment and wages, but when enterprises generally cut employment and wages, consumer income falls, markets stagnate and decline, overall profits decline.
Selling shares that are losing value and buying those with higher rates of return can drive stock market booms, but writing off the value of real means of livelihood leads to unemployment and the decline of economies.
Supporters of capitalism look to new technologies to bring economic crises to an end. In the past, periods of decline were transformed into booms by new technologies such as steam-powered industrial machinery, the building of railways, electrification, the shift from coal to petroleum, plastics, mass automobile use and air travel. But the impact of new technology is unpredictable. The latest new technology, computerization, has actually been accompanied by declining real wages, stagnating global markets and lower rates of investment in real means of livelihood.
To revive markets, capitalists rely more on militarism and war. Purchased by governments, military manufacturing does not flood markets and drive down profitability as occurs with additional production of consumer goods. Military production — typically cost-plus and protected from careful public scrutiny — generates higher than average profits.
War or its threat can justify massive government expenditures on research and development, which can give corporations access to profitable new technologies. When war destroys other countries’ means of livelihood, it eliminates competition. It can give victors control of new markets and cheaper sources of supply.
Capitalists may increase their profits, but for most people war is anything but beneficial. For countries invaded and occupied, wars are catastrophes of death and destruction. For countries that have not become battlefields, war means repression, shortages, rising food prices, loss of trade relations, unemployment, conscription, the maiming and death of brothers, sons, daughters.
From the 18th to the middle of the 20th century, war often appeared to benefit people in Europe, North America and the former British dominions. Control of the markets, supplies and surpluses of other countries made it easier for capital in the imperial centers to make concessions to unions and the poor at home.
But now that capitalist property relations have been established in nearly all countries, war can have no net benefits. Since the 1940s every war and occupation, from Korea, to Vietnam, Somalia, Iraq, Afghanistan, Haiti and Libya, have come with costs that far exceeded benefits. Of course most of the costs have been borne by the people who were invaded or occupied, but the U.S. and its allies also suffered unacceptable casualties, faced growing hatred and accumulated trillions in public debt. The only tangible benefit went to capitalists who profited from provisioning the military.
The capitalist drive to maximize profits also explains the externalizing of environmental costs. Capitalism is a system that allows small minorities to profit at the expense of others. Private ownership of what are social means of livelihood allows capitalists to pass the real costs of industry to communities, workers, future generations and other species.
Capitalism began with enclosures, the dispossession of rural populations, the genocidal destruction of indigenous communities, as well as the near total destruction of walrus, sea otters, whales, North American bison and many other species.
Twenty-first century capitalism is a world of private automobiles, sprawling suburbs, planned obsolescence and disposable products. Packaging often costs more than the products. Marketing budgets dwarf research and development. The manic, ever-expanding production and distribution of more commodities, the waste of labor and natural resources are systemic. Financial speculation generates more income than real innovation.
The working class now has the objective capacity to replace capitalism with economic democracy. Wage and salary workers are majorities nearly everywhere, but organized opposition to capitalism is largely non-existent. While we focus on single issues — wage rates, poverty, disparities, racism, sexism, or looming environmental crises — capitalist entitlement, the source of these problems, is left unchallenged.
Working people will remain an incoherent mass so long as we divide ourselves by occupation, industry, gender, sexuality, ethnicity, language, country and mutual competition.
No matter our occupation, our country, or our language, capitalists are in an unrelenting quest to maximize their profits by cutting our pay, employment, social entitlements, our rights to pensions, education and healthcare.
To make matters even worse, capitalists continue to externalize environmental costs, threatening the future of our children and the livability of our planet.
But criticizing capitalism is not enough. We need an alternative that will better serve the interests of humankind. That alternative is economic democracy. When economic democracy is seen to be the alternative, we will have no need to look abroad for an already existing system to mimic. We can look within, to the already existing working class. The working class, already doing everything necessary for economic well being, has the capacity to replace capitalism with economic democracy.
Economic democracy means replacing corporate ownership with social ownership, replacing capitalist title with equal human entitlement, and replacing master-servant relations with workplace democracy.
Replacing corporate ownership with social ownership means ownership by our communes — the counties, towns, cities, regions, provinces, states, nations and international communities we live in.
The aim is to bring possession of enterprises as close to local communities as is practical. Residents would replace shareholders as the beneficial owners of enterprises. One person, one vote would replace voting based on the number of shares owned. All levels of governance — towns, cities, regions, states, provinces, federal governments and the international community — would engage in transparent economic planning.
Equal human entitlement means the right of all inhabitants to participate as equals in their communities’ economic decisions. Replacing capitalist title with equal human entitlement would end the priority now given to private profit. Social planning would be motivated by employment opportunities, fair wages, social services and environmentally sustainable industrial activity.
When everyone — including people working in tourism, organic farmers, mushroom pickers, parents, teachers, students, scientists, as well as industrial workers — have an equal vote in their communities’ decisions, environmental concerns will be at the top of the order paper.
With workplace democracy, workers in all occupations — machine operators, maintenance people, administrative workers, engineers and managers — would democratically direct their labor time. Divisions of labor would continue, but hierarchies of power would be brought to an end.
Communities may democratically decide that everyone who works regular hours should be paid the same. Or they may decide that wage differentials are needed to encourage people to further their education and advance their skills. Or they may decide that more dangerous or less agreeable tasks should be better paid. Whichever the choice, disparities will be far narrower than under capitalism.
Owning communities would control the policies and overriding practices of enterprises. They would appoint auditors and the chairs of enterprise boards. Workers in each occupation would elect their supervisors and meet with other occupations to direct day-to-day enterprise affairs. Capitalist control of means of livelihood, and minority rule more generally, would come to an end.
The supporters of master-servant relations will cry: “Who will take charge; without someone to crack the whip, people will goof off; universal laziness will overtake us.” This is a contemptible prejudice against people who actually do the work. Even under capitalism, where most work for the profit of others, people with work experience know that pretending to work is boring, stressful and mind numbing.
Once workers are entitled to participate as equals in their communities’ economic decisions, and entitled to take part in the democratic direction of their labor time, it will be obvious that people are working for their communities and themselves. No longer alienated from their labor time, workers will be committed to the work they have freely chosen to do.
An important part of what the capitalist system does is create the workers it needs. What kind of workers are these? Good consumers who think they’re stupid, only care about themselves, hate unions and are scared of their shadow. Capitalism tries hard to create those kinds of workers.
What kind of workers does economic democracy need? Pretty much the exact opposite of what capitalism needs — smart, thoughtful, creative, environmentalist, caring, willing to stand up for themselves and others. How do we create people like that? Through struggle. A critical part of economic democracy will be creating the people we need to run the system. Marx thought everyone is naturally creative, but that capitalism stunted it. For him a central point of socialism was to unleash people’s creativity and that would only happen through struggle.
With equal human entitlement in an economic democracy, everyone’s needs — food, housing, healthcare, education and basic income — will be met as a social right. Wages will provide additional income. Perhaps some will choose not to work. Why would that be a problem?
Currently, in more prosperous capitalist countries, 30 percent of working-age populations are either unemployed or not in the workforce. When social labor is seen to be a right as well as a responsibility, more people will freely choose to be employed. Social labor will become voluntary social activity.
Capitalism makes it appear that the more we consume, the happier we are. But are we? Consuming has come to be a reward for the daily humiliation, stress and bullying of master-servant relations. Consuming more is beneficial so long as it actually meets our families’ needs. But who really believes that working longer hours to make more money to purchase more disposable, unneeded and unhealthy consumer goods actually improves anyone’s quality of life?
Given the choice, many people would prefer more leisure time. When economies are organized democratically in the interests of human well being, regular working hours are likely to be shortened — perhaps to 24 hours a week, or 1,000 hours a year.
Since communities and workplaces will be directed democratically, we cannot precisely predict what decisions will be made. We can predict that unlike capitalism, which is structured to create disparities, to entitle a few and dis-entitle many, economic democracy will be structured to serve the interests of all.
When everyone has an equal right to participate in their communities’ decisions and in the direction of their social labor, general well being will take precedence. Instead of profits, communities will focus on general well being, on providing each and all with the capacity to develop and advance their skills and opportunities. Social organization will aim to meet individual and social needs, while facing ecological problems directly and transparently.
Capitalists will say that replacing capitalist title with equal human entitlement is just another name for the expropriation of private property. We reply that capital is not legitimate private property. Capital comes from the surpluses generated by social labor. It appears as private property only because capitalist law gives a minority of wealth-holders the right to claim private ownership of the gifts of nature, socially produced assets and the net values produced by social labor.
Capital as it exists today comes from generations of exploitation of human beings and the gifts of nature. Capitalism began with enclosures, the driving of people from lands their ancestors had farmed from time immemorial. More capital was accumulated through the dispossession of indigenous people in the New World and the hunting and enslavement of Africans. Capitalist fortunes were made when imperial rulers in India and China declared lands private property, reducing peasants to landless day laborers. When crops failed they were left to starve as capitalists sold their produce where prices were highest.
Regardless, the supporters of minority entitlement will say: “Capital is legally acquired private property; it is the fruit of the labor of capitalists.” That is rich. Capitalism mocks the right of people to the fruits of their labor. Under capitalism, majorities labor not for themselves, but for the profits of minorities. Those who work hardest get the lowest pay and are provided with the least for their declining years.
Yes, capitalist law recognizes capital as private property. When capitalists make the rules, those rules benefit capital. In economic democracies, legislatures and courts will make and enforce rules that benefit all. The goal is to abolish capitalist minority rule.
The neoconservatives who now dominate public policy nearly everywhere claim that private capital creates jobs and income; without capital invested in jobs, unemployment will rise; everyone will be poorer. But the truth is capitalist investment decisions are made to maximize profits, not to create jobs. To maximize profits, investment goes to labor-saving technologies or to where labor is cheaper.
Economic democracies will have surpluses and savings for investment. These will be held and allocated by community-owned financial institutions. Where proposed investments are uncontroversial, financial institutions and enterprises will bargain terms. Where there are disagreements or doubts, public hearings will be held and decisions will be made democratically. New enterprises that result will be community-owned and operated by the rules of workplace democracy.
Capitalist ideologues claim that without the focus on private profit there is no clear measure of the success of enterprises. Yes, profitability is a clear measure, but one that only benefits a small minority of shareholders. In an economic democracy communities would normally expect enterprises producing for exchange to generate enough revenue to cover costs and more, but the overriding goal will be human well being.
The measure of success of communities’ economic decisions will be based on balances: on balancing employment opportunities with available labor; on balancing imports with exports; on balancing public revenues with needed public services, and on balancing industrial activity with the carrying capacity of environments.
Such social control, capitalists insist, would be the end of free markets. But free markets exist only in the imagination of ideologues. Markets comprised of numerous equal buyers and sellers, where all equally influence supply and demand, and all are equally aware of market conditions, are a myth.
Under capitalism, markets are regulated and manipulated by dominant corporations that control marketing networks, supplies, patents, and spend massively on advertising. For capitalists, markets are free when capitalists unilaterally make the rules, when government regulations that inhibit their control are eliminated and workers are denied the right to bargain collectively. Free trade means the right of transnational corporations to direct international exchange for their private profit.
In an Economic Democracy, changes in supply, demand and prices can assist communities in deciding where to allocate labor and resources. Markets will be regulated democratically and transparently by all levels of governance. The aim will be to provide communities everywhere with access to international markets and supplies, while promoting local markets, local supplies and local employment.
The goal will also be to create new forms of community that break down the self-interest and mutual indifference that characterize capitalist exchange. The goal will be to go beyond the narrow self interest of “I’ll give you this, if you give me that” and “I only care about what I can get from you” to “From each according to their ability to each according to their need.” If we can achieve that, we will also have achieved an end to the alienation that harms us all.
Supporters of capitalism claim that economic democracy will end progress because it is capitalists who innovate. But this is rarely true. Bill Gates did not personally devise the computer operating software that made him one of the richest men in the world; he bought it for a relatively small sum. There is no evidence that capitalists are more likely to be innovators. On the contrary, individuals actually engaged in production processes are more likely to see new opportunities.
Economic democracy will inspire more people to look for innovations that are environmentally sustainable. Judgments as to what innovations are practical will not be made behind closed doors by venture capitalists, but transparently by community-owned financial institutions.
If innovators fail to convince one community, they will have opportunities to pitch their proposals to other communities. Although innovators are unlikely to become fabulously wealthy, they could receive royalties, or be provided with employment more suited to their interests. And they would have the satisfaction of being successful innovators.
The supporters of wide disparities in income claim these are the source of great culture. Without the patronage of the super-rich, the greatest architecture, paintings, sculptures, music and science would not have been produced. Yes, when a tiny minority appropriates the wealth produced by entire communities, they have the means to define culture. But when communities control the surpluses produced by their social labor the arts will no longer be dependent on the patronage or charity of the super rich.
In a system of economic democracy, the arts will flourish. Art will become part of daily living and working. Its aim will be to make life more enjoyable, inspiring and beautiful. Artists will be freed to look at the human condition from distinctive perspectives.
The elitist view that the masses will degrade culture is ridiculous. It is capitalism that has made money the only standard of value. It promotes shallow consumerism. Its culture is fast food chains, cars, action movies, video games, professional sports, commodified sexual relations and the systemic disregard for environmental integrity and beauty.
Skeptics will say: “Why such confidence in the working class? Workers side with their employers on environmental issues. They support militarism and war. More workers probably supported the Tea Party than the Occupy Movement.”
Yes, capitalism encourages short-sighted, mean-spirited, competitive self-interest. It bombards individuals with advertisements designed to convince them that consumption is the essence of existence. It produces the consciousness of the people subjected to capitalist property relations.
Does the working class have the capacity to end capitalism and build economic democracy? The working class is the overwhelming majority and does everything necessary for human well being. This question can be restated. Does humankind have the capacity to end minority rule? Are we doomed to forever being controlled by and in the interests of a tiny minority who are entitled to put their profits ahead of human well being?
People who have spent their lives under capitalism are conditioned to accept the system’s priorities. Economic democracy and movements to construct a world based on cooperation, democracy and equality will transform human consciousness.
As community and workplace mobilizations against capitalism gain momentum, as working-class solidarity deepens and broadens, capitalism will lose the capacity to produce populations in its own image.
As social entitlements expand, as democratic community ownership replaces capitalist title, as workplace democracy replaces master-servant relations, the self-centered competitiveness of capitalism will be replaced with community spirit, human solidarity, respect for nature, and the understanding that individual interest is tied to social and environmental well being. People will come to deliberately, cooperatively and democratically produce their consciousness.
The sycophants of capitalism in universities, the media, churches and advertising, claim that private ownership of capital is the source of individual freedom, democracy and human happiness. We reply that freedom for capitalists means power over others. Capitalists have opposed democratic advances every step of the way.
Despite the daily propaganda to the contrary, capitalism itself has become the greatest barrier to self-expression and creativity. Freeing all to develop their individual capacities requires more than individual will; it requires deliberate social initiatives.
For capitalism, freedom belongs to the wealthy few. It reduces freedom and value to money, to how much one makes, what is most profitable. It warps self-expression and creativity.
Human beings as a species will be freed to develop all their capacities only when basic needs have been made a human right, when all have equal access to employment opportunities, education and healthcare. All will be freed to be fully human only when everyone is entitled to a voice and equal vote in their communities’ social decisions.
Capitalism will maintain its grips on means of livelihood, politics and mass consciousness so long as the working class fails to challenge militarism and war.
Working-class opposition to capitalism is incomplete so long as militarism and war are unchallenged. Armed force remains the foundation of minority rule. The death, destruction and hatreds generated by war become barriers to the international working-class solidarity that is required to end capitalism and build economic democracy. Force used against people abroad can be turned against working people at home.
The countries we live in — our national, regional and local governments — must be our overriding political focus. But limiting solidarity to within nations is dangerously divisive. Nationalism has been used to expand social entitlements. But nationalism is also used to divide workers, to direct the anger of the impoverished, unemployed and marginalized against others — foreign countries, immigrants, ethnic minorities — instead of against the system that is responsible for our common plight.
The power of capital is global. Economic democracy cannot succeed without becoming an international movement. This does not necessarily mean that we must have an international party. It does not mean we must wait for workers in other countries before we can challenge capitalism. But it does mean that we must come to consciously identify with all humankind.
We must look for ways to act in solidarity with working-class struggles elsewhere. Where we take initiatives against capitalism, we must actively look for the broadest support. We must aim to build on working-class campaigns wherever they are.
One important lesson history teaches us is that capitalist property relations are not “natural” or inevitable. Human beings have satisfied their needs in a multitude of ways. Capitalism itself came about by replacing feudalism. The ideologues of feudalism claimed it was eternal and God-given, but it passed into history.
The supporters of capitalism claim it is the “natural” order, the source of everything good: democracy, political freedom and rising living standards. But history makes it clear that the democratic rights we have now were won by common people, by unions, the poor, women, racialized minorities and colonized people. At every step capitalists opposed these movements.
Capitalism is an economic system created by capitalists to suit their interests. Capitalists don’t want markets free from rules. They want markets with rules made by capitalists, free from interference by others. At the beginning of capitalism its main enemy was feudalism, but now it’s democracy.”(3)