J.D. Moyer

beat maker, sci-fi writer, self-experimenter

The Natural End of Capitalism

The bull’s run is over.

Capitalism, as we know it, is reaching the natural end of its global life cycle.

Human beings will retain some of the better aspects of capitalism, including the right to private property, competition in well-regulated markets, robust trade, reasonable compensation for intellectual property, and a modified corporate structure.

The aspects of capitalism that are not long for this world include:

  1. Ayn Rand/Gordon Gecko-style individualism, “greed is good,” disdain for cooperative efforts and collectivist values.
  2. Crass materialism and consumerism as acceptable social norms.
  3. Acceptance of worker exploitation, dehumanizing working conditions, extreme poverty, homelessness, poor nutrition, limited access to healthcare, and substandard education as “necessary costs” in a “free” market economy.
  4. The “predator/sociopathic” corporate charter model, under which corporations are legally obligated to prioritize profit-making over the environment, public health, worker health and safety, research and innovation, public and community wealth, and everything else.

In short, we’re moving towards humane markets (providing for each other) and away from human markets (exploiting each other).

Why is predatory, consumeristic capitalism on its way out? A number of factors are simultaneously converging:

  1. Human population growth is tapering off. Many people alive today will be alive to witness the most significant moment in our collective history — the human population peak. Capitalism is based on perpetual growth, which is not compatible with permanent population decline. Some of the challenges related to population decline will include abandoned cities, rewilding, and permanent economic shrinkage.
  2. We are running into severe environmental limitations. We have triggered the Anthropocene, a geological age characterized by mass extinctions, radical changes in local climates, overall global warming, acidification of oceans from excess CO2 absorption (which will result in almost no fish or coral reefs, but lots of jellyfish and algae), rising sea levels (and massive floods), endless droughts (resulting in the current Dustbowlification of the central US), deforestation, chemical pollution, gargantuan gyres of plastic detritus, and overall ecological shittiness. These problems are a direct result of a devouring capitalist system that sidelines such considerations as “externalities.”
  3. We are in the midst of a radical reorganization of production methods. More and more things are essentially free to produce and distribute, and can be shared/co-created via networks and decentralized production centers (home workshops, personal computers, 3D printers). Open-source production methods, freeware, and peer-to-peer distribution methods directly threaten top-down, strictly controlled capitalistic profit-generation models. Open-source is upending capitalism. Edit – as a commenter on Facebook pointed out, automation (scripting) is doing the same thing for services as peer-to-peer, open source, and 3D printing are doing for products. Humans optional.
  4. Attitudes toward capitalism are changing. The United States, the world’s glowing beacon of capitalistic success, is no longer so shiny. Vast regions of our country display decrepit infrastructure. Cities are going bankrupt. Unemployment is high and underemployment is rampant. Millions go without access to professional healthcare. Our educational system produces only middling results. Wealth inequality is extremely high, and the tax-dodging, politically manipulating plutocrats are fighting tooth and nail to maintain their ill-gotten gains and privileges. Meanwhile, nations that lean more towards social democracy sport better infrastructure, better educated kids, nicer looking cities, cleaner environments, and healthier, happier citizens.

In summary, the 10,000-year pyramid scheme that has been generating wealth at the expense of non-renewable planetary resources has reached its limit. We have exhausted, in order, mega-fauna, pristine virgin forests, fossil fuels, free food from the ocean, fresh water sources, and an atmosphere that regulates temperature, rainfall, and local weather patterns. We have even used up some elements (like helium, which permanently escapes into outer space), and destroyed entire landscapes to extract gold, silver, copper, and rare metals.

The free ride is over, and now we begin a slow, painful deleveraging (both ecological and financial/economic) as we attempt to repair ecological systems and weather our own population peak (in other words, taper off, and not collapse).

So what do we do now? Is all hope lost?

The alternatives to consumeristic predatory capitalism are not mysterious, nebulous, or theoretical. They are already operating and established in many ways, on both large and small scales. Some examples include:

  1. Dozens of countries (including most European countries, but also Canada and Japan) operate more or less as social democracies, and manage to provide healthcare, education, public safety, and other benefits to all of their citizens. Taxes are higher, but income and social inequality are lower. Social trust and happiness tend to be higher in functioning social democracies, which has a lot to do with more income equality.
  2. Large-scale cooperatives such as the Mondragon Corporation provides models for how to simultaneously achieve business excellence and social responsibility.
  3. Open-Source Ecology and their audacious Global Village Construction Set project provide a window into the future of open-source production and distribution methods (beyond information products and into the realm of functioning machines).

Some citizens of the United States are slavishly dedicated to right-wing “winner take all” capitalism, and are outrageously fearful of the lefty pinko “welfare state.” What is really threatening the wealth of our country is not worker benefits, food stamps, public schools, and national healthcare, but rather unfunded long-term invasions of foreign countries, Wall Street bailouts, and ultra-rich tax dodgers.

The Way Forward

Globally, we’ve already explored the consequences of extreme collectivism. We’re not going back. Reasonably regulated free markets are more efficient and generate more wealth than markets that are owned and operated by the state, with no private incentives. I’m not arguing for communism, an end to private ownership, or for “all information to be free” (no intellectual property rights).

What I’m pointing out is that the unstoppable trends of human population peak, the Anthropocene, and open-source production and distribution leave us no choice but to provide for each other during the big deleveraging. Nations that prioritize the health and wealth of citizens over the health and wealth of corporations will fare better during the approaching epoch of restoration, repair, and rewilding.

Is the future of humanity bright? I think it is, especially in terms of scientific and technological progress.

Is consumeristic “winner take all” capitalism the best system for ushering in a bright future for humanity? The Libertarian Space Men think so. I’m placing my bets with the Gaia Collective.

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13 Comments

  1. Linda Lancione

    Bravo!

  2. JD, nice work here, this is basically where I’m at on this as well. I think you might like this article and I would be interested to hear your thoughts on it. This was one of my favorites of the last year: http://www.postcarbon.org/article/714558-the-fight-of-the-century

    Tyler

    • Good article, though it took me a long time to read it. I agree with many of Heinberg’s points. One point I differ on — I’m not sure if a global decline in energy production is a foregone conclusion. Yes — fossil fuels are running out (as they have been for at least fifty years), but Germany shows us that solar is practical for a large-scale industrialized nation. And who knows what energy production breakthroughs the next few decades will bring.

  3. Boo

    “Canada and Japan…manage to provide healthcare, education, public safety, and other benefits to all of their citizens. Taxes are higher, but…”

    Ultimately, the most accurate measure of “real” taxation levels is to look at public expenditures as a % of GDP. Looking at 2011 figures for Canada (39.7%), Japan (37.1%) and the USA (38.9%), the tax levels are about the same. It’s more a matter of priorities, and where the money goes.

  4. platonov

    I’ve never understood when people talk about “capitalism” or “the environment.”

    Abstractions at that level are more vacuous than their ease of use would suggest. 😉

    We’re at our worst with words like that.–

    • Hi platonov. Just trolling, or interested in dialogue? I drilled down on both those terms with lots of specific examples. If I had to pick just two specific areas, they would be corporate charter reform (as described above), and geoengineering solutions to address ocean acidification.

      Any ideas or further comments?

  5. Lucas Jimenez

    Bravo! Well informed and well thought out. I learned some things from reading your post and from reader’s comments as well.
    Clearly, the writing is on the wall concerning the demise of Capitalism. The only question is weather or not it takes our global civilization with it when it goes. I have been educating myself about these issues quite a bit lately and testing alternative economic theories by finding the fundamental weakness of each. I am convinced that we are doomed to repeat our failures unless and until we find a way of eliminating money from the system. The conundrum, of course, is how a system operates successfully without ascribing value to commodities and without suffering the same deficiencies of Communism.
    Anyway, I loved your writing and logical presentation. If you have sources to share, I would love to read more; especially about how social democracies work.

  6. Kevin

    J.D. – I enjoy reading your blog, you’ve really got your thinking cap on and I resonate with you in multiple areas.

    First, semantics…Wikipedia: Capitalism is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.

    I don’t think we are seeing the end of Capitalism, I think we are seeing the end of Corporatism and autocratic hierarchies. Free humans can, should and will own private property, which includes the means of production. Free humans will also create goods and services and trade with each other to their mutual benefit, which I think is fairly called ‘profit’.

    Corporations and governments are huge hierarchies, or pyramids. In these pyramids, cost is pushed to the bottom and benefit is pushed to the top. This organizational structure generates inequality by its nature. Attempting to push Socialist ideals into a hierarchy will inevitably result in inequality, as is seen in totalitarian states.

    The antidote to hierarchies is self-organized networks. We won’t look at government for the solutions of tomorrow, we will look to ourselves and create what we need together – just like Linux and the Global Village Construction Set.

    Kevin Carson has a short blog post on this titled ‘Why Self-Organized Networks Will Destroy Hierarchies — A Credo’. http://c4ss.org/content/4247.

    I highly recommend Carson’s book Organization Theory. It’s free to download. I think you could really dig into it.
    http://www.mutualist.org/sitebuildercontent/sitebuilderfiles/otkc11.pdf

    • Exactly, Kevin. Too many people conflate capitalism with corporatism – capitalism hasn’t lost its luster, it has simply been replaced with corporatism.

  7. End Wage Slavery

    Sorry but there is no such animal as a “humane market/humane capitalism”. By its nature capitalism is inherently exploitative. It cannot exist without the concept of surplus value, i.e. the vast difference between the value a worker’s labor adds to a company per hour versus the tiny wage he or she is paid for that labor. It’s how the business owner pays his overhead costs and can still take home a profit, without which he wouldn’t remain a business owner. If you doubt this ask yourself: How long would capitalism survive if Congress passed a law tomorrow making it mandatory that workers get paid equal to 90% of the value added by their labor (meaning if I am adding $50 in value per hour I get paid no less than $45/hour for it)? A couple days? Maybe a week? Not long, I can tell you for certain.

    No, your headline is correct while the substance of your article is way off. Capitalism is indeed reaching its natural end, it’s inevitable. But it won’t be replaced by some “reformed” or “watered down” version of itself. It will be replaced by direct worker ownership of the businesses, every business. The only people in this world who will not and cannot exploit the workers are the workers ourselves. Every business will end up in the hands of the people whose sweat and labor has kept that business a going concern rather than a boarded-up storefront. Anyone who owns their own one-person business (e.g. hot dog stand, newspaper kiosk etc.) will be 100% unaffected since their business is already worker owned. But every business in which a person or group of persons owns the means of production and uses wage labor to perform the work will face the end of the world as they know it because that form of money making is incompatible with the best interests of society at large and the average person.

    A revolution will be necessary to overthrow the social order and its hand puppet government and replace it with a government that truly represents the will of the average person. That revolutionary government will use the coercive powers of government, taxation, legislation, and if necessary the police and military, to physically transfer ownership of the productive assets from their current owners, the exploiter class, into the hands of the workers. Think about it: workers will finally have what they never did, a job where they actually get something out of it commensurate with what they put into it. Emancipation. The future looks bright. Just not for capitalism and capitalists as people are finally starting to realize what a horrific existence wage slavery is.

    Capitalism, not just the “worst” parts of it, will end up where it belongs: in a museum.

    • You could be correct! But where does the concept of risk fit into your ideal economic model? Who takes the risk, and who absorbs the loss when things go wrong? Is it legitimate for the business owner to retain a larger share of profits in exchange for a larger share of risk?

      Just last week a woman who works for me lost a few hundred dollars (cash). I trust her completely … the money was not stolen. She is paid hourly; a fixed rate instead of a % of profits or some other arrangement. So when the money was lost/stolen, the loss was mine. She still gets paid.

      Is there something wrong with this arrangement? Shouldn’t workers have the right to choose security over ownership? I have offered employees partnerships and been turned down. They chose the regular wage, the security, and lack of risk. Not every worker wants a part of ownership, and I don’t blame them! Ownership means taking complete responsibility, taking risks, making difficult decisions, and so forth. Not everybody wants to deal with that.

      I code for a living. If a new startup offered me a flat fee or a % of profits, I might choose the flat fee. It’s possible that company would make (or be sold for) a large amount of money, and I would have made the wrong decision. But shouldn’t I have the low-risk/more secure option? Would that be allowed in your ideal system, or would every worker be required to be an at-risk active partner? Or would workers somehow be guaranteed both security and profit-share? Who would take the risk in that case?

      (Happy ending to the story … the cash turned up in her laundry)

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