Apr 11, 2016

Five Dangerous Thoughts about Capitalism

Our system of modern capitalism is just one story; it is not the only one there is. It’s not inherent within us. It isn’t some inevitable expression of predefined Human Nature. It was invented by human beings and so human beings can change it. But in order to get there, we first have to engage in some ‘dangerous thinking’.
By Alnoor Ladha and Martin Kirk / therules.org
Five Dangerous Thoughts about Capitalism
That is, there are no dangerous thoughts for the simple reason that thinking itself is such a dangerous enterprise. . . . nonthinking is even more dangerous. – Hannah Arendt

Wherever we turn, it seems that there is a great narrowing. Ideas that have engaged great leaders, philosophers, poets and visionaries through the ages are being boxed away as if they are obvious, and settled. What is human progress? What do we mean by ‘growth’?  What is freedom? How do we balance our wants and needs against those of future generations? These are the foundations of human life and society and yet there is ever-less interest in them in the corridors of global power.

The front edge of this wave is that mesh of political and corporate actors who wield material global power; this includes the leaders of G20 nations and Fortune 500 companies and the vast majority of parliamentarians and executives that surround them. Each of them will give you the same basic answers. They will say that progress is, first and foremost, economic growth. Everything – by which they mean everything  – else is secondary because it’s necessarily an offshoot of that growth; it’s the economy, stupid! Growth, in turn, is the increase of profit or the national equivalent, Gross Domestic Product (GDP). Ergo, GDP is progress. Freedom is the capacity of me and mine to have and to own, to progress and to grow according to the above. Our wants and needs are paramount; sacrificing an inch of that freedom is unconscionable.

And that’s if they’re moderates. It matters little, now, whether they are nominally on the left or right of any aisle; everyone with direct access to global power believes the above to be so obvious as to preclude alternatives. How else, they say, could it possibly be?

The answer to which should be, how long have you got?

This narrowing is happening at a time when what is required is a great expansion. Is this truly the best/worst system human beings can create? Does economic growth really capture who we are?  Does vast inequality represent the best humanity can do? Is destruction of our planetary habitat inevitable? To answer these sorts of questions we need more options, not more uniformity; more deep thinking, not more rote acceptance; more opposition, not more repetition of the cold, dry lie that there is no alternative.

We would like to suggest that our only absolute limitation is our collective imagination, expressed through our will to change the mythologies that hold this house of cards together. We believe there is an emergent consciousness, stretching out against this narrowing, gradually becoming aware of itself and its awesome power.

We can hear its insurgent voice in social movements as diverse as the Arab Spring, the Chilean Winter, the Idle No More Indigenous movement, the anti-corruption movements in Brazil and India, the gentle but insistent dissent of Occupy Central in Hong Kong, the furious disbelief of protestors in Ferguson and New York City, and the dozens of African Awakenings happening across the Continent. They are each different and specific, but at the heart of all of them is a voice saying that we have a system that is failing 99% of us.  As whole populations are learning to communicate and think together in order to cope with whole-world problems, it says, we can do much, much better.

Our system of modern capitalism is just one story; it is not the only one there is.  It’s not inherent within us.  It isn’t some inevitable expression of predefined Human Nature. It was invented by human beings and so human beings can change it.  But in order to get there, we first have to engage in some ‘dangerous thinking’.


Dangerous Thought One: Ideology rules

Those in power have always told us to beware of ideology. There is a strong inference that it represents a warping of our pragmatic ability to get things done by whatever means necessary. But that’s just plain wrong. And a necessary distraction, of course. Ideology is the set of ideas and ideals we all must hold to operate in the world. It is not a weakness of those who don’t agree with us.

The deep irony is that by demonising ideology they are clearing space for their ideology in particular. If only bad or stupid people are ideological, the logic goes, those we vote for and buy from, who fill our TV screens and make our laptops, somehow can’t be ideologues themselves.  The ideas that bind them must be above ideology. That is their story.

But is there any way in which the US spending of $400 billion annually on the military is not a statement of ideology?  Or the subsidization of very large, very rich corporations like Exxon Mobil or GE with taxpayer’s money? Or the failure to regulate the casino banks of Wall Street? These are all active strategies for success by some measure, grounded in ideas and ideals, and so are, by definition, deeply ideological. Simply saying your ideals float above ideology doesn’t make it so. It simply turns our fear of ‘being ideological’ into a means of reinforcing the potency of the status quo. As the philosopher Slavoj Zizek says, “ideology is always a background condition”.

The dominant ideology in the world today is called neoliberal capitalism. Some call it the Washington Consensus or Market Fundamentalism, but for the sake of this conversation, we’ll call it Neoliberalism.

Quite simply, it is a practical expression of three philosophical premises. First, that our relationship to others is best filtered through a competitive lens (am I better, richer, etc.), which inevitably leads to rigid hierarchies, zero-sum logic and a lot of unthinking dogma.

Second, it equates wealth with life success, which is then equated to virtue (e.g. rich people are good, poor people are bad, therefore poverty is a moral failing). Finally, the individual is the primary unit of power (e.g. Thatcher’s famous line “There is no such thing as society, just individuals and families”). People are responsible to themselves first, peers second, and possibly their God, in that order. Classic Ayn Rand.

The implications for this ‘moral philosophy’ are diabolical. It leads directly to the economics of the self-obsessed individual, which leads to the atomization of our society and the focus on personal consumption as salvation. It justifies the bankrupt notion of trickle down economics, smuggling in notions such as: ‘self-interest benefits everyone’, ‘there’s an all-knowing invisible hand’, ‘there is supreme efficiency in the market’, ‘the more rich people the better’, etc. And it prioritizes private property rather than the collective ownership, which in turn leads to what the late Harvard economist J.K. Galbraith called “private affluence and public squalor”.

Neoliberalism can be summarized by this equation: selfishness is rational and rationality is everything; therefore selfishness is everything.


Dangerous Thought Two: Climate change and inequality are created by our current economic system.

How many of us truly believe the old economist’s trope that the world’s major issues such as climate change and inequality are ‘externalities’ of our current system; things that have come to be entirely alongside or even in spite of what humans have been doing? It is self-evident that they are the logical outcome of a system that requires ever more consumption to drive perpetual material growth, and that is fueled by the extraction of a finite supply of natural resources.

Bloomberg recently reported that for every dollar of income created in the US since 2008, 93 cents of the income growth has gone to top 1%. So it doesn’t matter where that money is made, 93 cents is going to the top 1%. Therefore, every dollar of wealth created by definition creates more inequality. As coders would say, this is not a bug in the system, but a feature of the system.

Relatedly, the activist and scholar Firoze Manji has suggested that climate change is not man made, but capital made. Every dollar of wealth created in the world heats up our planet because we have an extractives and fossil fuel based economy.

Capitalism turns natural resources into commodities in order to attract more capital. That’s its sole purpose. As the recent International Panel on Climate Change (IPCC) report has shown, we are now on course for a 3-4 degree rise in temperature by 2050, which is correlated to a 40% – 50% loss of biodiversity. In other words, half of all plant and animal life on this planet will no longer be with us in under 40 years because of the voracious human appetite for more growth. Scientists tell us that we are already in 6th great planetary extinction with 150 – 200 species dying every day. This is 1000 times the baseline rate of extinction.

The logic of neoliberalism and our current economic system locks us into this path dependency, so it feels like we can never risk slowing growth. We even subsidize our own destruction by giving more money to fossil fuel companies and expanding their ability to destroy the planet through additional infrastructure like new pipelines and oil exploration projects. Exxon made over $40 billion in profit last year, the highest profit in the history of money, while the US government gave them over $1 billion of tax payer money in subsidies in the same year. And they are paying less than 15% in tax, and paying zero federal tax.

Most of us understand these links and the logic, but with the great narrowing in the corridors of power there is seemingly no way to turn that knowledge into concerted action. At least, that is what the power elites would like us to believe.


Dangerous Thought Three: We all live in the Matrix

There are some of us who believe that we are exempt from the neoliberal operating system. That this is an American or British, or even now, a Chinese phenomenon. But we would argue that through globalization and the global rule of corporations, we have now entered a late stage of capitalism in which we effectively all live in a One Party Planet – the Neoliberal Party.

Under this party, we are connected into a virtual Matrix by a web of beliefs, laws and structures.

We are programmed from birth to believe in the moral philosophy of competition, individualism, the virtue of material consumption, and social status determined by the wealth hierarchy.

We are told that wealth is a sign of virtue. And it’s a short step from there to believing that those with the most money are the most virtuous, that they deserve to have power over the rest of us.

We are convinced that paying off every debt to rich corporations and people is a moral obligation – that if we can’t, there is something wrong with us and we deserve to be punished.

In reality, we all know instinctively that we are defined by our connections to each other. Our individuality is a truth within the intricate web of society. Our individuation may help us operate in the world and navigate relationships, but it is not an impermeable barrier that we should celebrate as the be all and end all of life.

It is self-evident that the richest are no less connected than anyone else, which means that they, like everyone else, rely on the society of humans around them for their wealth – on government subsidies and services, on public education and tax-funded research, and on the hard labour of people poorer than themselves.


It is self-evident that the richest are no less connected than anyone else, which means that they, like everyone else, rely on the society of humans around them for their wealth.


Virtue is not the preserve of those who have hoarded the most money. If anything, the reverse is true. There is mounting scientific evidence to suggest that being so addicted to material wealth that you acquire it in the millions or billions is an unhealthy addiction that stunts moral, emotional and spiritual growth, and it can lead to highly sociopathic behaviour.

The line between sociopathic behaviour and a psychopathy is blurry at best. Just look at how large corporations, very often supported by governments, are forever coming up with even more ingenious ways to create debt, and aggressively promote ways of life and moral codes that require it so they can be confident that we will keep funneling money in their direction in the form of interest. This is a means of ensuring we remain submissive and docile as we focus all of our energy struggling to meet the obligations they have defined.

When there is potential to overturn the operating system – for example, the 2008 financial crisis – it in fact punishes the poor first and hardest as we are enmeshed in the global capital infrastructure from the food we buy to where our pensions are invested. The old trope holds true that the rich become even richer because power begets power, and money begets money – and the two are interchangeable. And this is what is most valued by the machine.

The Matrix is so powerful and adaptable that even when we do dissent, it often gets commodified and sold back to us. There were Occupy Wall Street posters being sold at Wal Mart last Christmas for over $40 USD a pop. Even techniques for spirituality are co-opted to make us better capitalists. There has been an exponential rise of Buddhism, yoga, meditation, Ayurvedic and other Eastern practices as crutches for mental burnout and spiritual ennui in capitalist countries.

The dark spider web of neoliberal belief is so powerful because it binds economic logic to a moral logic, so to question the economic logic (e.g. growth) is to question the morality of how we live and our very personhood. Since our jobs and our identities are all intertwined with that of the system, we are incapable of breaking free of the logic.

As the philosopher John Ralston Saul has said: “we assume that people of merit rise to the top of the system. But in fact, the system finds the people that are best constructed to further its own existence, and draws them to the top.” In other words, if the system values selfishness above all else, selfish people above all others will be rewarded with what the system has to offer.

We have all created our own stories in order to feel as comfortable as we can in the Matrix. People at the World Bank or the Gates Foundation believe they’re helping the poor, and in limited ways many of them are. People in advertising agencies think they’re contributing by being creative and increasing consumer choice, and at a micro-level this may be true. But by accepting and then validating the logic at the heart of the system they are in fact ensuring the murky waters of the status quo stay toxic. If we attempt to prune a tree in a rotten orchard, are we really having any impact on the health of the orchard?


Dangerous Thought Four: We live in false economy

So what is the root driver of all this madness? How deep do we have to dig?

The answer to that is, until we find what binds all the destructive forces. And within the current Matrix that we are all unmeshed, the root of growth is debt.

In a debt-based monetary system, the very creation of money creates debt. Therefore, growth has to exceed interest (which is the payback of debt) in order for capital to increase.

We thus get locked into perpetual debt-based growth, which creates inequality and destroys our planet. As David Attenborough has said, “If you believe in infinite growth on a finite planet, you are either a madman or an economist.”

We value the wrong thing – i.e. financial wealth – so we in turn measure the wrong thing – i.e. growth. We therefore live in a false economy.

Let’s give a concrete example. The global economy roughly grew at 3% last year (2014), which generated an additional $2.2 trillion in ‘new’ products and services. In other words, commodified natural resources and human labour to the tune of $2.2 trillion. This is equivalent of global GDP in 1970. It took us from the dawn of humanity to 1970 to achieve an annual GDP of $2.2 trillion dollars – we now require that amount just in the delta of a single year. Next year we may need 1974’s GDP, then 1990’s, etc.  Soon we’ll need to 2015’s GDP in order for the global Ponzi scheme not to implode.

The mathematical way to describe this is that we are now in a period of exponential growth. When this happens in an organism we call it cancer: uncontrollable growth of cells to the point of self-annihilation. And because we are all locked into a Matrix that serves the neoliberal ideology, we are made complicit in our own self-annihilation. Growth is couched in jobs and securing investments, and indeed that’s true, so it becomes all of our business to create further growth.

This is not a dark room conspiracy – from the survival of the most basic cell all the way up to the infinite complexity of the Internet, this is how complex adaptive systems behave. They create and emerge from matrices of energy and matter that support their existence. The logic of capital is merely the logic of a particular complex, adaptive system. As Thomas Picketty recently has proven in such detail, left to its own devices, the system will always reward capital with more capital, pulled from the sources of production it has.

And while the destruction amasses, we are sold a false idea of the economy as a necessary savior to keep us complicit.

In 2011, 110 of the 175 largest global economic entities on earth were corporations, with the corporate sector representing a clear majority (over 60 percent) over countries. The revenues of Royal Dutch Shell, for instance, were on par with the GDP of Norway and dwarfed the GDP of Thailand, Denmark or Venezuela.

In other words, more economic power is in private hands than public. Most corporations started the globalization process by exploiting human labor where it was cheapest and the rules were the most slack. They then capitalized on the lack of global governance around tax and essentially opted out of the social contract with humanity – there’s now $32 trillion sitting in tax havens and 60% of world trade happens between MNCs own subsidiaries, largely through what’s known as transfer mis-pricing. And then the kicker, they subverted our democracy. Research from Harvard’s Saffra Center for Ethics shows that corporations achieve up to a $220 ROI for lobbying Congress. Why would you ‘invest’ your money in anything else.

We are told that as the rich get richer the rest of us will get richer too.  But we know now that this is a lie. Average wages are lower today than they were in the 1960s, and household incomes are stagnating while the 1% are growing richer than ever before. Today, the richest 85 people in the world have more wealth than the poorest 3.5 billion.

We are told that we can solve global poverty if rich countries give more aid to poor countries.  But see beyond the rhetoric and it’s horribly obvious that aid is flowing in the other direction.  Rich countries are rich because they grab land and natural resources, and exploit the human labor of poor countries.  We will only be able to eliminate poverty once we stop this plunder.

We believe that governments run the world, and that those governments are democratic.  But the most powerful entities on earth are corporations, not governments, run for private profit not public good.  And these corporations exercise undue influence over government policies.  In a system where money buys votes, democracy is nothing but an illusion, and the hopes and desires of the majority are rarely considered.

We believe that our media is free and impartial.  But in reality 90% of the media is controlled by only six corporations, which silence all criticism of their interests.  And our Internet – which we rely on to communicate and share ideas – is poisoned by a global network of state surveillance.

We are told to that our current way of living provides some kind of ‘order’ forgetting that the entire system has been built upon the history of colonialism, imperialism and genocide. Not to mention the constant state of war, and plunder from poorer nations, that is required to prop up the Western way of life.

The only way to change things is to change what the system itself values, and to change the very rules that articulate and maintain those values.


Dangerous Thought Five: Another story is possible

These myths are falling apart around us, and the story that they uphold is beginning to collapse.  The system is constructed by a set of laws and rules and beliefs constructed by human beings. As the comedian Russell Brand says, “Capitalism is not real; it is an idea. America is not real; it is an idea that someone had ages ago. Britain, Christianity, Islam, karate, Wednesdays are all just ideas that we choose to believe in and very nice ideas they are, too, when they serve a purpose. These concepts, though, cannot be served to the detriment of actual reality.”

We yearn for a different story, a better story, a story that is truer to the values we know are right – a story that celebrates our connections to others and to our broader world.  We are eager to cast off debts, to stop being complicit in the exploitation of our brothers and sisters around the world, to cease the destructive pillage, to abandon the competition that turns friend into foe, and to recover our relationships.  We are ready for healing.

We know that there are other stories out there.

Anthropologists tell us that for most of human history we lived in small egalitarian societies that rewarded co-operation and sharing and punished selfishness and accumulation. No one is saying we can go back to a hunter-gatherer lifestyle, but it’s an indicator of what’s possible for human nature – in fact, we have over 90,000 years of inspiration of what is possible.

Just ten years ago scientists discovered what they call mirror neurons, proving that we are hard-wired for empathy.  And behavioral economists have shown that, when left to our own devices, tend to default to values of fairness and justice. These are the better, truer angels of our nature.

All we lack is the confidence to see beyond the constraints of the present story.  And we start by asking the hard questions we have been told not to ask.  People around the world are beginning to do just this.  They are rising up in response to our civilization’s crisis – from Occupy Wall Street to the Arab Spring, from protests in Brazil to the Chilean Winter, from the Zapatistas in Mexico to the student uprising in Quebec, from the Idle No More Indigenous People’s movement to Transition Towns around the world – these are all expressions of a new world that is possible. They are sites of great hope for us all.  The world is beginning to heal—and we can take it farther, faster.

There are new ideas bubbling up all around the world that point to a better way. Some of these solutions are not difficult, like moving away from GDP as a measure of progress, taxing carbon at its source, creating a global wealth tax, banning certain types of advertising, putting a moratorium on rigged trade rules (like the proposed Trans-Pacific Partnership), and even putting limits on how powerful corporations can become (e.g. the anti-trust laws that used to exist around the world, most notably in the United States up to the 1970s).  Others are more radical, like removing corporate money from politics, abolishing military spending, revoking corporations’ right to do business if they don’t serve our collective interest, moving to a four hour work day, providing a basic citizen’s income to every human being, devolving power to local communities governed by direct democracy, an even getting rid of our debt-based currency system altogether.

Ideas abound.  The decision is ours to reclaim our past and our future. Will we continue as soldiers of the status quo, regardless of destruction it will guarantee? Or will we stand with the world’s majority to create the better world we know is possible?


Alnoor Ladha and Martin Kirk are founding members of /The Rules, a global network of activists, organizers, designers, coders, researchers and writers dedicated to changing the rules that create inequality and poverty around the world.

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