Sunday, 3 June 2007
Capitalism is ecologically destructive, socially unjust and undemocratic. Discuss.
Slavery, land enclosure, forced labour, colonialism and most of the accompanying rape and pillage is ignored. Capitalism did not evolve gently but emerged covered in blood, splinters of bone and slimy viscera. When things fall apart the results are rarely pretty. The capitalist scholars today are also largely silent when it comes to the creation of new markets in far from democratic states such as Chile under General Pinochet and China. Equally the greenhouse effect, declining fish stocks, the rise of the automobile and the prevalence of low-level nuclear waste suggest that statistics indicating a cleaner environment need questioning.
Capitalism is ecological destructive, socially unjust and undemocratic. Discuss.
Whats wrong with capitalism?
Anti-capitalists vigorously challenge the claims of the market utopians such as Lomborg or Norberg. The modern market is dominated by a tiny number of mega corporations who have scant interest in ‘market forces’ but this is of little concern to advocates of capitalism who have simply invented new economic theories that explain why planning and control by monopolistic multinationals is in the public interest. For example, the Austrian economist Schumpeter has argued that monopolies through a process of creative destructive, where by they invent new patented products to preserve their power, drive economic growth. Other neo-liberals deny that corporations have more power than the thousands of individual firms in competitive markets:
That isn't true. Corporations can acquire monopoly status in a system of tariffs, licensing and coercion, because then consumers are denied the option of buying from anyone else and potential new businesses are prevented from competing. Capitalism means freedom to pick and choose and to reject the businesses which aren't up to scratch. Corporate liberty in a capitalist economy is the same thing as the waiter's liberty of giving the customer a menu to choose from. And the whole point of free trade is that other waiters - even foreign ones - are allowed to come running up with alternative menus (http://www.johannorberg.net/?page=indefense_qa).
The neo-liberals have been more than happy to surf across their contradictions. Planning by governments or local communities is still condemned by the Economist and similar journals as essentially flawed. Most fundamentally, the far from bloodless origins of capitalism are mythologized out of the neo-liberal version of history. Slavery, land enclosure, forced labour, colonialism and most of the accompanying rape and pillage is ignored. Capitalism did not evolve gently but emerged covered in blood, splinters of bone and slimy viscera. When things fall apart the results are rarely pretty. The capitalist scholars today are also largely silent when it comes to the creation of new markets in far from democratic states such as Chile under General Pinochet and China. Equally the greenhouse effect, declining fish stocks, the rise of the automobile and the prevalence of low-level nuclear waste suggest that statistics indicating a cleaner environment need questioning.
Challenging the neo-liberal orthodoxy, anti-capitalists point to a range of problems that have grown with globalisation. Poverty is perhaps the most obvious, despite the fact that neo-liberalism should according to its advocates deliver high levels of growth that reduce poverty, there is much evidence to suggest that income inequality has grown over recent decades. Indeed during the 1990s both absolute and relative poverty have increased.
The World Bank (Economic Outlook 2000) shows that since 1980 the number of people living on less than $2 per day has risen by almost 50% to 2.8 billion—almost half the world’s population. A report from Christian Aid noted that between 1960 and 1997 the gap between the poorest fifth and richest fifth more than doubled, that the top fifth had 86% of the world's wealth, while the lowest twenty percent had just one percent. The wealth of the world's three wealthiest billionaires is more than that of the GNP of all the least developing countries and 'their 600 million people.' Those who argue that globalisation reduces poverty would do well to study the record of the US, arguable the most globalised nation on Earth:
The gap between rich and poor in America is the widest in 70 years, according to a new study published by the Center for Budget and Policy Priorities.
The research, based on newly released figures from the non-partisan Congressional Budget Office, shows that the top 1% of Americans - who earn an average of $862,000 each after tax (or $1.3m before tax) - receive more money than the 110m Americans in the bottom 40% of the income distribution, whose income averages $21,350 each year. The income going to the richest 1% has gone up threefold in real terms in the past twenty years, while the income of the poorest 40% went up by a more modest 11%. (Schifferes 2003).
In the former Soviet Union the creation of a market economy has led to catastrophe. In an article subtitled ‘Russia appears to be committing suicide’, the Economist (2 October) notes that since 1989 the countries population has plunged by several million and is projected to fall from 147 million today to 120 million in 2030. Declining fertility, violence, sexually transmitted diseases, tuberculosis and alcoholism are just symptoms ‘of the long, dark night of the Russian soul ushered in by the disorienting collapse of communism’.
There are number of explanations as to why globalisation paradoxically boosts GNP rates and at the same time pushes up poverty. Globalisation by allowing companies to move easily from country to country means they pay far less tax to governments, which leads to less redistribution. The monopoly power of drug firms has been a major factor in pushing down life expectancy in Africa. Christian Aid cites Mara Rossi, head of the AIDS department of the Catholic Diocese of Ndola, Zambia, who noted "The availability of drugs to treat HIV/AIDS is an example of how globalisation fails to benefit some of the world's poorest and most needy people. Because of the monopoly of multinational pharmaceutical companies, drugs are not available to the majority of HIV infected people in Asia and Africa. These drugs must be made accessible in countries such as Zambia. It's no good promising loans to buy anti-retroviral drugs that in the end will increase foreign debt. The majority of AIDS patients in Africa need clean water and food as well as drugs to treat their illness" (Christian Aid 2000) Neo-liberalism encourages governments to cut welfare programmes in both the south and north of the globe. Subsidies for cheap food have largely gone, increasing levels of starvation. Privatisation has made it more difficult for the poorest to afford basic utility services such as clean water. Welfare benefits have been made reduced or abolished in parts of the globe including the US. Trade unions are under threat. Typically Zhang Junjiu, vice chairman of All-China Federation of Trade Unions (ACFTU) has argued that globalisation makes it difficult for trade unions to protect workers pay and conditions. While the Chinese economy grew strongly in 2004, millions were laid off by state enterprises and multinationals relied on casual workers with low pay. Urban unemployment rose to 8 million. Multinationals can keep moving to countries with low wages, making it difficult for workers in developed countries to maintain employment and for those in poor countries to improve conditions (www.chinaview.cn 2004-10-10).
Democracy is another area of concern for the anti-capitalists, while the number of states with nominally democratic systems has increased, globalisation has robbed voters of much of their influence over governments. WTO rules tend to reduce the sovereignty of local and national government by ruling that much legislation, produced by states, is protectionist and therefore illegitimate. The US government used WTO rules to force EU countries into taking dairy products that contained growth hormones. At present, the WTO is battling to make the EU accept unlabelled genetically modified products, despite the fact that opinion polls suggest that the majority of European citizens wish to be protected from GM. Multinationals who often have more wealth than nations can effectively force countries to reject legislation that may damage corporate interests. Even supporters of capitalism sometimes admit the essentially undemocratic nature of the market, for example, Thomas Friedman author of The Lexus and the Olive Tree, a long hymn to the neo-liberal globalisation, has argued:
For globalism to work, America can't be afraid to act like the almighty superpower that it is....The hidden hand of the market will never work without a hidden fist -- McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies is called the United States Army, Air Force, Navy and Marine Corps. (New York Times, March 28, 1999)
Poverty is increased and democracy eroded by a process of social dumping or levelling down driven by both the WTO and the multinationals. Countries that reduce governmental controls, taxes and public expenditure attract more investment by international corporations. In the desperate race to attract foreign investment countries have a huge incentive to sweep away forms of social protection such as trade unions rights, maximum working hours and an adequate minimum wage. Despite an ageing population fewer and fewer workers can gain access to adequate pensions from their employers. In countries such as China and the Philippines blandly named Export Processing Zones (EPZs), have been created where manufactures can ignore legislation protecting workers, so as to drive pay and conditions down to lower average total costs.
The anti-capitalists believe that the process of neo-liberal globalisation has concentrated wealth and power into the hands of an ever-diminishing minority. This minority is increasingly US based and uses both global institutions and the US state to cement its dominance. Thus, the existence of the USA as the world’s hyper power is seen as increasingly damaging, allowing a tiny minority of North Americans to shape the world so as to serve their own interests. The growth of capitalism is based on the exploitation of the working class, small farmers and peasants and it largely excludes women from meaningful participation in political and economic decision-making. Racism is part of the process. All but a tiny minority are defined as ‘the other’ and seen as a means of creating wealth rather than as human beings with their own ends: creative, social, cultural and ecological. Anti-capitalists also critique the ethos of capitalism, where local diversity in the arts, cuisine and other aspects of life are driven out creating a homogenized global culture. Everywhere individuals drink Coca Cola, wear Nike and eat McDonalds. The sociologist George Ritzer has created the concept of the macdonaldisation of society to explain how mass production has delivered a world of increasing modular uniformity (Ritzer 1995). Such a capitalist culture breeds alienation, a feeling of homeless in a world dominated by accountancy, which degrades even those who benefit in material terms from the rule of capital.
Ever increasing capitalist globalisation damages the environment by lowering standards of protection and by locking us into an escalating system of waste. The world circles to destruction around a mountain of decaying trainers and trashed soft drink cans. The drive for endlessly increasing international trade means that goods are transported ever rising distances driving up fuel consumption and in consequence, the greenhouse effect. Higher agricultural exports tend to depress prices because of over supply and force farmers to exploit ecologically sensitive and essential mangrove swamps and rainforests. Ever increasing economic growth in turn means that more and more scarce resources are demanded, so as to maintain the profit system. Capitalist growth for the whole planet would demand according to some critics the resources of four planet Earths and such resources would have to grow to maintain the capitalist system into the future (Wilson 2002). Neo-liberals argue that the world is getting cleaner, resources are growing rather than shrinking, poverty is disappearing and democracy is on the rise. The evidence is against them on all these counts.