Wherever you happen to live in the world, there are some worrying trends impacting you. We are all on Spaceship Earth, beset by problems that can only be fixed by a fundamental redesign of our life-critical systems. But, we’re only just realizing that. Moreover, none of us onboard have the skills or experience to correct these flaws at scale. Setting aside any petty differences, so as to work effectively as a crew, is now critical.
Ranging from the climate crisis, now quite obviously an emergency as we shatter a number of planetary boundaries that put us in jeopardy, to wars and genocides, a lack of critical resources like water, pollution from plastics and ‘forever’ chemicals, and the ominous threat of a nuclear accident, it’s clear that we need to look once again at money, who has it, and how we use it.
Going back centuries, economies centered around meeting basic needs and ensuring practical utility. We had work, artisan guilds, trade, innovations, and markets. All of these aligned with the social idea of use-value. In contrast, although it really only blasted off during the industrial revolution as a development of feudalism, capitalism prioritizes profit-making as an essential driver. And profit-making is contingent on competition and continual growth.
Competition and continual growth are inevitable and essential elements of capitalism: money is invested, goods and services are sold at a profit, which can then be reinvested to generate more. In this system, profit becomes capital that can be stored or used for a variety of purposes.
Enabled considerably by the new forms of mass production, the shift from artisan use-value to corporate capitalism influenced how goods and services were produced, distributed, and valued in society. However, capitalism's pursuit of profits doesn't necessarily negate the creation of use-value. In many instances, the pursuit of profit can lead to innovations and efficiencies that enhance the overall utility and accessibility of goods and services. Moreover, the concept of use-value hasn't disappeared entirely even within capitalist economies. Consumers still make purchasing decisions based on the perceived usefulness of products.
That said, critiques of capitalism often focus on how profit motives can sometimes lead to inequalities or the prioritization of financial gain over broader societal well-being. Balancing profit inducements with a concern for social and environmental impact remains a complex challenge for us all.
Ever since the class distinction between the owners of capital and production, and workers, there was the potential for abuse. Predatory capitalism, a term that's been associated with a distortion of the original capitalist ethos, and sadly quite common in the West today, is where the system is characterized by unfair and unethical practices that prioritize profit maximization at the expense of employees, consumers, or society as a whole. If the system becomes excessively predatory, which typically happens through anti-competitive or monopolistic behaviour, worker exploitation, financial speculation, social mistreatment, or harm done to the environment, its actions will become excessively competitive, toxic and unscrupulous.
Not all companies today are necessarily capitalist, although they all have to find a way of existing within the capitalist framework. Some companies are content with consistent annual profits (think about your local restaurant for example) based on use-value (paying rent, wages, and nutritious ingredients). Many are not-for-profit businesses that generate revenue but cannot extract profits or pay dividends to owners. In these cases profits are returned to the company or donated to a special cause. Obviously they still broadly compete with each other in the capitalist framework of industrial economism, but they can't be directly compared to large capitalist corporations like Exxon, Google, Monsanto, Apple and Meta.
Capitalism was originally built on the notion of 'free' markets, where people choose what to purchase and are can exchange their labour in return for wages. Today that's a false proposition on two counts. We live in an industrial system of production and consumption where all those who don't actually own capital are required to sell their labour to survive. So it amounts to Hobson's choice. Then the market dominance of technological behemoths like Meta, Alphabet, Microsoft and Amazon effectively lock us in to purchasing their products, concentrating economic power in the hands of a few.
Back in the 1500s, when capitalism was introduced into Britain with the Acts of Enclosure, many people refused to work for others to earn a profit. They preferred to be poor, unemployed, and even homeless. This led to the creation of the term vagabonds, outcasting those refusing to work so that someone else can profit. With The Vagabond Act, people could be whipped and put to death if they were repeatedly caught begging. Capitalism was nothing like emancipation. Introduced with brute force, the model was replicated in all the colonies, which is one of the reasons we have such economic, social and political disparities today between the global north and the global south.
In Europe, Capitalism replaced feudalism, which hadn't been so great either. But that is no excuse for not wanting something different and better today. The contrarian economist Yannis Varoufakis is confident we're entering a new phase of capitalism, which he calls techno-feudalism. Predatory in nature still, the winners of the new capitalist game are the owners of algorithms, people like Jeff Bezos, for example, to whom even the industrial capitalists now have to pay rent.
Taking all these things into account it's easy to see why the socialist ideal of equality is appealing to many as it aims to address economic injustice and promote fairness by advocating for collective ownership and control of resources. Whether it constitutes a 'perfect' economic system depends on a number of factors.
Advocates of socialism argue that it leads to greater social justice, more equitable distribution of wealth, and the provision of essential services like healthcare, education, and housing to all members of society. By reducing or eliminating private ownership of the means of production, socialism seeks to minimize exploitation and empower everyone in the society equally - not in terms of outputs, but of access.
Critics point to potential drawbacks of purely socialist economic systems, including inefficiencies, lack of innovation, and occasionaly draconian limitations on individual freedom. Centralized planning and state control can lead to bureaucratic inefficiencies and reduced incentives for entrepreneurship and innovation. Socialist economies have certainly faced economic challenges, while instances of authoritarianism in some socialist regimes have also raised concerns about individual rights.
While all of that was certainly the case in the Soviet Union, and by all accounts probably remains that way today in states like North Korea, the same charges can hardly be levelled at China and its socio-economic miracle, which still continues to evolve at an incredible rate in spite of constant carping from economists in the West predicting its imminent downfall.
In practice China, like many other modern economies, adopt elements of both capitalism and socialism. These mixed economies combine market mechanisms with government interventions to address market malfunctions, provide social safety nets, and promote economic stability and growth while striving to uphold principles of equity and justice.
To suggest this is the idea model for the future might be regarded as somewhat bold. But we do know that the extreme disparity between today's wealthiest individuals and the very poorest segments in our society is unsustainable. The net worth of the wealthiest individuals is staggering. The combined wealth of the top 100 billionaires, for example, is now reaching trillions of dollars. On the other hand, the poorest segments of society struggle to meet basic needs such as food, shelter, and healthcare.
Clearly this kind of disparity in wealth and income distribution has significant implications for social justice and overall well-being. It is also inevitable that while the ultrawealthy continue to derive their fortunes from real estate, inheritances, business ownership and investments, rather than physical or mental labour, the moral dilemma will remain vexing and contentious.