Capitalism – the actual workings – is a brief exploration of how capitalism functions as integrated economic activities, politics, government and people living within its boundaries.
This is an explicit rejection of the neoclassical economics found in almost every college, university, and business school. The idealized models of neoclassical economics may suit the imaginings of academics but they are not useful to understand our present situation nor guide us towards a sustainable future. We also reject much of the political rhetoric of our politicians and political system. Markets do provide many positive outcomes. However, they are not suitable for every situation and in fact, undermine much of our social life.
The analysis begins by posing the question of what an economy might be for? It is not to make a tiny group absurdly rich nor for corporations to control our politics and make investment decisions that chiefly benefit themselves while squeezing out projects that could benefit the vast bulk of the population.
Before getting into the meat of the discussion we have to take note of neoliberalism as a transforming force in capitalism. This clumsy word, neoliberalism, refers to the politics and policies of the past 50 years that enshrined markets as a solution to every problem; that famously led to President Ronald Reagan announcing, “government is not the solution to our problem; government is the problem”; that told the poor and infirm to get off their asses and get to work; that rewarded financial shenanigans with massive government bailouts.
A key insight into how capitalism works is: the rich and corporations don’t believe any of the neoclassical models or the political rhetoric of our politics and media. The rich and corporations have bought up government in order to set the rules and regulations of capitalism to favor them.
So, watch what the rich and corporations do to guide you in understanding how capitalism actually works.
We start our exploration by examining a central outcome, capitalism produces precarity, insecurity, for most of the population. Producing precarity is a key day-to-day feature of capitalism. These precarities are numerous: employment, income, health, housing, retirement, education, mental health, and time. Precarities interact to multiply impacts. Precarities are not a fact of nature. They are produced by capitalism, by the decisions of the rich and corporations about how our income and wealth as a species are used and distributed.
Then we take an accounting of a number of structural elements of capitalism:
- instability (recessions, depressions, booms, busts)
- unequal power between employer and employee
- tendency to monopoly
- short investment time horizon
- ubiquitous use of external costs (pollution in every sphere of the world, exhaustion of the earth, worker injury and death),
- failure to provide housing, healthcare, family, education, and retirement
- manipulation and corruption of human desires through mass marketing
- misuse of markets – see the US healthcare system for example
Finally, we must take note that capitalism is a system with no speed control and a requirement for infinite growth. This on a planet that is obviously finite. Capitalism is not the way forward.
See the Table of Contents