In a speech on Nov. 11, 1947, Sir Winston Churchill reminded the UK's House of Commons that 'democracy is the worst form of government, except for all those others that have been tried.' In a similar fashion, capitalism is the worst economic system, except for all the others.—Matt Barnes, 2014.
There is no alternative [to neoliberalism]—Margaret Thatcher, 1980s.
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It's often said that, for any flaws, capitalism is better than any economic system we might replace it with. Its most enthusiastic supporters claim the advances in human living standards since the industrial era can be attributed to capitalism, a claim which pervades popular culture. At the less enthusiastic end, capitalism is viewed as a problematic and flawed system, but when contrasted with the nominally socialist states of the 20th century, most commonly Soviet Russia, it is considered to have been the better choice.
If we somehow have to choose between the two, there's truth in the idea that Western democratic capitalism has been more successful than its apparent 20th century alternative. Beyond this false dichotomy, though, there is less to be excited about. For sure, capitalism has lead to rapid economic growth in Western nations, and is successful if this is how success is to be measured. However, if Russia is the supposed poster state for socialism, there can be little doubt that the US is the symbol of capitalism. Despite the success of the US model in growing its overall economy, half its citizens are at or below the poverty line. Yet, if everyone lived like an American or a citizen of a comparable nation, the conservative estimate is that we'd need four earths to make that sustainable. What this all suggests is that economic growth is a poor metric for overall economic wellbeing (let alone general wellbeing), and that what fuels this short-term growth is decidedly unhealthy for the planet overall.
It is not difficult to understand how this situation has arisen. Capitalism has also proven to be highly adaptive in how it seeks out this economic growth, shifting from an industrial base, to a financial base in the neoliberal era (the FIRE economy: finance, insurance, and real estate). A culture of mass consumption fostered by the corporate mass media has created demand for increasingly disposable, increasingly high value goods that help to perpetuate the capitalist model. As of December 2016, the latest iPhone sells for $1700 NZD. Such a product exemplifies the fast-paced nature of modern capitalism. I doubt many people would have anticipated such a product in the 1990s, yet there has been a market for similarly priced smartphones for several years now. The size of the market has expanded as financing puts such items in reach of people who could not afford them outright, and because marketing and social pressures increase the desire for what is effectively a status item. The phone itself is designed in a disposable, non-modular fashion: here is the 30-step guide to remove its battery. Despite Apple's production of expensive, high-volume goods, only recently has it started auditing its supply processes to avoid conflict minerals, and the company cannot state that their supply is conflict-free. The other glaring contrast for a company able to produce a $1700 smartphone: the workers who assembled it work under enormous stress, and in dire conditions that could hardly contrast more with the lives of its corporate owners.
Given such unpleasant realities, it is important for capitalism that no realistic alternative is apparent. The point of comparison for Western capitalism is often the Soviet Union, which collapsed after a long decline and an existence that was largely in political and economic isolation. Soviet Russia is associated in Western democracies with inefficiency, grey shirts, and totalitarianism, exemplified by the reign of Stalin. However, the focus that Stalin put on industrial growth ahead of all else, including worker's rights, is entirely at odds with Marx's view of socialism, as is dictatorship itself. Indeed, socialists at the time sharply criticised Stalin's regime. Perhaps the most biting example was British socialist George Orwell's satire Animal Farm. It seems the critiques of the Soviet state by contemporaneous socialists are little remembered, as popular Western media so often synonymises socialism and totalitarianism. The result is that little general interest exists in understanding the historical reasons for the failure of the Soviet model beyond assuming it was a failure of socialism.
Yet, Russia is hardly the only example of 20th century socialism. Not only do a range of lesser known examples exist, but they stand to teach us more than looking to Russia or China. Areas of Europe including Spain and Italy have long histories of practicising non-capitalist models with varying degrees of success. From anarcho-syndicalism in Catalonia, to the Yugoslav experiment, to smaller-scale projects such as the Centri sociali of Italy and elsewhere, a diverse range of non-capitalist ways of living have been explored. All have experienced inordinate external pressure to end, through military, police, economic, or diplomatic force. While none of these examples provide fully fledged models of socialism that could be readily applied at a national level in the present day, all provide us with much we can learn from. And beyond models themselves, perhaps there is a lesson simply in this repeated desire to escape from capitalism.
The smaller-scale examples above focus on decentralisation of power as an antidote to the self-reinforcing power imbalances that characterise capitalism. Maximal dencentralisation is embodied in anarchism, the rejection of states in favour of small-scale organisation. However, just as socialism is associated with totalitarianism in the Western capitalist mindset, anarchism is associated with chaos, and has been given little genuine consideration, despite the support from prominent academics such as Noam Chomsky. For its supporters, anarchism is not about disorder or chaos, but is instead about community--simply without the coercion of a nation-state. Interestingly, many new models have been emerging in the current phase of late capitalism with strong community and cooperative focuses--new food and solar energy cooperatives; community-managed spaces for knowledge sharing, and maintenance activities such as bike repair, and appliance repair; local exchange networks; alternative models for banking that don't focus on economic growth but instead on community development. These initiatives are responses to the failure of the state to meet community needs. As spontaneous initiatives that arise out of people's self-motivated desire to come together and cooperate, they are an embodiment of the local, dencentralised, ideas at the heart of anarchism.
So is capitalism the best system available to us? Even if we can only look to models that have already been tested, the honest answer isn't yes, but rather that we don't know. If we are willing to be honest about the failures of capitalism for people or the wider planet, then the answer is more likely no. And if we can develop new models that encourage the types of transitions already arising in response capitalism's failures on community, human rights, sustainability, and environmental protection the answer is almost certainly no.
If we somehow have to choose between the two, there's truth in the idea that Western democratic capitalism has been more successful than its apparent 20th century alternative. Beyond this false dichotomy, though, there is less to be excited about. For sure, capitalism has lead to rapid economic growth in Western nations, and is successful if this is how success is to be measured. However, if Russia is the supposed poster state for socialism, there can be little doubt that the US is the symbol of capitalism. Despite the success of the US model in growing its overall economy, half its citizens are at or below the poverty line. Yet, if everyone lived like an American or a citizen of a comparable nation, the conservative estimate is that we'd need four earths to make that sustainable. What this all suggests is that economic growth is a poor metric for overall economic wellbeing (let alone general wellbeing), and that what fuels this short-term growth is decidedly unhealthy for the planet overall.
It is not difficult to understand how this situation has arisen. Capitalism has also proven to be highly adaptive in how it seeks out this economic growth, shifting from an industrial base, to a financial base in the neoliberal era (the FIRE economy: finance, insurance, and real estate). A culture of mass consumption fostered by the corporate mass media has created demand for increasingly disposable, increasingly high value goods that help to perpetuate the capitalist model. As of December 2016, the latest iPhone sells for $1700 NZD. Such a product exemplifies the fast-paced nature of modern capitalism. I doubt many people would have anticipated such a product in the 1990s, yet there has been a market for similarly priced smartphones for several years now. The size of the market has expanded as financing puts such items in reach of people who could not afford them outright, and because marketing and social pressures increase the desire for what is effectively a status item. The phone itself is designed in a disposable, non-modular fashion: here is the 30-step guide to remove its battery. Despite Apple's production of expensive, high-volume goods, only recently has it started auditing its supply processes to avoid conflict minerals, and the company cannot state that their supply is conflict-free. The other glaring contrast for a company able to produce a $1700 smartphone: the workers who assembled it work under enormous stress, and in dire conditions that could hardly contrast more with the lives of its corporate owners.
Given such unpleasant realities, it is important for capitalism that no realistic alternative is apparent. The point of comparison for Western capitalism is often the Soviet Union, which collapsed after a long decline and an existence that was largely in political and economic isolation. Soviet Russia is associated in Western democracies with inefficiency, grey shirts, and totalitarianism, exemplified by the reign of Stalin. However, the focus that Stalin put on industrial growth ahead of all else, including worker's rights, is entirely at odds with Marx's view of socialism, as is dictatorship itself. Indeed, socialists at the time sharply criticised Stalin's regime. Perhaps the most biting example was British socialist George Orwell's satire Animal Farm. It seems the critiques of the Soviet state by contemporaneous socialists are little remembered, as popular Western media so often synonymises socialism and totalitarianism. The result is that little general interest exists in understanding the historical reasons for the failure of the Soviet model beyond assuming it was a failure of socialism.
Yet, Russia is hardly the only example of 20th century socialism. Not only do a range of lesser known examples exist, but they stand to teach us more than looking to Russia or China. Areas of Europe including Spain and Italy have long histories of practicising non-capitalist models with varying degrees of success. From anarcho-syndicalism in Catalonia, to the Yugoslav experiment, to smaller-scale projects such as the Centri sociali of Italy and elsewhere, a diverse range of non-capitalist ways of living have been explored. All have experienced inordinate external pressure to end, through military, police, economic, or diplomatic force. While none of these examples provide fully fledged models of socialism that could be readily applied at a national level in the present day, all provide us with much we can learn from. And beyond models themselves, perhaps there is a lesson simply in this repeated desire to escape from capitalism.
The smaller-scale examples above focus on decentralisation of power as an antidote to the self-reinforcing power imbalances that characterise capitalism. Maximal dencentralisation is embodied in anarchism, the rejection of states in favour of small-scale organisation. However, just as socialism is associated with totalitarianism in the Western capitalist mindset, anarchism is associated with chaos, and has been given little genuine consideration, despite the support from prominent academics such as Noam Chomsky. For its supporters, anarchism is not about disorder or chaos, but is instead about community--simply without the coercion of a nation-state. Interestingly, many new models have been emerging in the current phase of late capitalism with strong community and cooperative focuses--new food and solar energy cooperatives; community-managed spaces for knowledge sharing, and maintenance activities such as bike repair, and appliance repair; local exchange networks; alternative models for banking that don't focus on economic growth but instead on community development. These initiatives are responses to the failure of the state to meet community needs. As spontaneous initiatives that arise out of people's self-motivated desire to come together and cooperate, they are an embodiment of the local, dencentralised, ideas at the heart of anarchism.
So is capitalism the best system available to us? Even if we can only look to models that have already been tested, the honest answer isn't yes, but rather that we don't know. If we are willing to be honest about the failures of capitalism for people or the wider planet, then the answer is more likely no. And if we can develop new models that encourage the types of transitions already arising in response capitalism's failures on community, human rights, sustainability, and environmental protection the answer is almost certainly no.
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