WHY IS CAPITALISM KILLING US?
Blame the mounting cost of transactions
In October 2023 the Biden-Harris Administration announced a broad initiative to crack down on junk fees — surprise, hidden costs companies sneak onto consumer bills (the White House’s words). Those of us living in a credit card-driven society are familiar with such fees.
First, there were the obvious ones: costs for financial services from banks and brokers, some hidden, some not. Those were followed by costs associated with buying products online which are ubiquitous, somewhat more transparent (i.e., for delivery) and accepted by most. A recent iteration of adding such additional costs now includes services.
All of the activities described above are transactional. Directly or indirectly, purchasers pay a fee for internet providers, software and platform developers, manufacturers, sellers, banks, and credit card companies. Consider what percentage of daily survival requires such transactions. Initially, the transactional cost seemed a reasonable trade-off for time and convenience.
I would argue that this assumption is no longer valid. The impact of living in a society that is drowning in transactions is now visible and worrisome.
Let me explain.
1. The banking crisis of 2008 was precipitated by the packaging and selling of over-valued properties — financial maneuverings that required zillions of transactions.
2. The student loan debacle was created over decades with thousands of intermediaries and lenders requiring zillions of transactions.
3. The astronomical private credit card debt has been marketed as a lifestyle choice that facilitates players up and down the transactional chain for each to take a slice.
4. Private equity purchasing power now buys rental homes, farms, and elderly-care centers. Clients communicate with representatives and online assistants — transactional.
5. The service industry was next. How many intermediaries are there in the purchase of a concert ticket, food order and delivery, or even placing a sports bet? Services are chopped up requiring more and more steps to complete a purchase. The service itself is commoditized and the entire process, like with goods, is transactional.
6. Lastly, the relationship with the internet and all aspects of the cyber environment that enable such transactions is itself transactional. Users pay for a service that steals data and returns it in the form of paid advertising to maintain the flow and growth of transactions. Artificial intelligence (AI) will likely exacerbate this addiction.
This transactional economy is allowed to flourish because the economic system that the world inherited from the past and built on provides for such a scenario. Peeling back three centuries (about the time economics became a science) of economic policy analysis and mathematical formulas, reveals capitalism’s roots in philosophy and a view of reality accepted since the work of Issac Newton. It holds that what the human species perceives with its senses is real and operates according to knowable natural laws such as gravity.
This is known as mechanical materialism. Gravity’s equivalent in the socio-economic realm is “self-interest,” a concept that has driven development since the opus of eighteenth-century economist Adam Smith. And it has worked to enable large numbers of the species to enjoy relatively comfortable lifestyles — particularly light-skinned, urbanites.
In recent years, however, criticism of capitalism as the world’s dominant economic system has intensified. Capitalism is territorially, racially, and ethnically exploitive, and is resistant to easing gender disparities. It promotes greed. Many consider it to be immoral.
Now enormous wealth from technological innovation controls the future direction of investment to build in a new generation of AI technology for profit and control. Yanis Varoufakis, the former Greek minister of finance, describes the economic system that is emerging as techno-feudalism and declares that capitalism is dead.
I won’t go that far, but I will assert that capitalism in its current state has created a form of dependency. While families, friends, and commerce enjoy “free” international connectivity, technology expands and deepens to arbitrate this connectivity’s terms and conditions. Human beings’ understanding of and connection to one another, as well as to nature and the economy, is now strictly transactional.
But there is a way out!
Based on the work of Einstein and his contemporaries, science has revealed a new version of reality — and thus, a new philosophical foundation for economic thinking. All existence, including that which is perceived or not, is an energy field, composed of subatomic particles operating in accordance with the principles of quantum physics. The particles emit energy known as quanta. They are the building blocks of a revised worldview.
This quantum view of reality challenges the assumptions and certainties of Newtonian materialism and mechanics on several fronts.
- The quantum worldview is multidimensional. At the quantum level, particles exist only as possibilities, known as superposition, which is the basis for quantum computing. In digital computing, problem-solving is limited to binary bits defined as either 1 or 0. Since quantum bits or qubits exist as both 1 and 0 at the same time, solutions are rendered simultaneously and faster. Scientists call this parallel processing.
2. The act of observation or measurement determines the particles’ state of being (i.e., no longer in a superposition). Reality comes into focus via the act of conscious intervention — the human observer. Sentient beings with agency create their own reality.
3. Subatomic particles communicate with each other, including over vast differences — a phenomenon known as entanglement. Communication implies responsiveness. At the quantum level, the particles are interconnected and reality acts as a whole. For Italian physicist Carlo Rovelli, reality is relational.
The implications for economic thinking are staggering. Once society raises its collective consciousness about this relational reality, realignment of the basic components of economic thought can begin. For example, based on the three characteristics above, consider anew the following.
Nature: when natural systems fail, economic systems fail, and Nature is under threat. There is no distinction between the natural and non-natural world. i.e., quantum biology. Perhaps economists should note Native American artist Juane Quick-to-See Smith’s reference to the encyclopedic language of Indigenous people for new names for nature and how to interact with it.
Value: if reality is multidimensional, then the definition of value needs to be greatly expanded. A variety of ideas and perspectives should be welcomed and the parameters and standards for evaluating value revisited and revised.
Humanity’s role: if consciousness is a necessary ingredient in defining the new reality, then individuals and society are responsible for incorporating a relational view of reality into economic thought. Unpacking the connection between labor and capital; debt, development, and agriculture; and technology’s grip on human communication would be good places to start.
A former Canadian industrial fisherman provides an example. When the cod stocks collapsed off the coast of Nova Scotia, he began searching for a less exploitive career. This fisherman is now an ocean farmer who grows kelp, a protein-rich product used in animal feed and bioplastics. Before he fished to generate financial transactions. Now transactions support his renewed, reciprocal relationship with nature.
Capitalism has evolved into a socio-economic system built on superficial relationships that exist primarily to facilitate and ensure more and more transactions, valued in their own right. To the contrary, an economic system built on the principles of quantum reality emphasizes the depth and quality of relationships first. Transactions exist to support those relationships.
Humanity cannot allow the nuance and complexity of human relationships to be demoted to just transactions. Economics must be reconstructed from its philosophical roots in science, upward. Perhaps a new discipline of quantum economics, that redefines the species’ economic relationship to nature and each other, will emerge. There is much work to do.
©Carol E. Leutner 2024
Carol E. Leutner is an author, lawyer, and international civil servant. A graduate of the University of Maryland, she also earned a joint MBA/JD from the University of New Mexico and a Master in International Law from Georgetown Law School. Carol writes on race, economics, and culture. Her treatise on economics and metaphysics won an award at the American Economic Association annual meeting in 1982.
Her first book, RACE CONSCIOUSNESS, A Personal and Political Journey is available on Amazon. Her second book, focused on 21st-century paradigm shifts, is forthcoming in 2024. Carol can be contacted at www.carolleutner.com.
