A More Perfect Capitalism
Climate crisis and oligarchy need not end the capitalist story
Imagine the first self-aware being. She awakens, looks around, and finds herself on an unimaginably rich and fertile planet, abundant in energy, and set in constant motion. The passing of time and all the laws of physics allow her actions to drive consequences to exploit more energy and shape her landscape. She senses the “bestowal of riches” all around her, and she tastes them. If she is smart and enterprising and possessing of a modicum of good fortune, she can accumulate beyond any rational need and, with more good fortune, beyond any whim or want and, with even more good fortune, she modulates her needs, whims, and wants as a moral creature.
It is easy to imagine the opposite. She awakens instead on a mostly desolate planet, without trillions of barrels of buried oil and troves of energy-rich elements. Rather than everything needed to run global societies for tens of thousands of years scattered about like so many Easter eggs in a video game, rather than a bright and stable star set the perfect distance away, she knows only want and extremes, escaping to underground caves for the heat of two-hundred-degree summers and the cold of minus-100-degree winters. There is no business to start, no energy or people to exploit, no creativity to trifle with, only survival and pain avoidance.
Fortunately, our world is the abundant one, evolving its governments and philosophies to match the needs and wants of a people, who oftentimes exploit beyond all measure but who sometimes insist on a limit. Capitalism emerged from the feudal darkness: populations gathered in cities, hereditary landowning lords lost their power, and a new breed spread their treatises enshrining the rightness of accumulation, the “invisible hand” guiding like the hand of god. The ruling societies “enlightened” as they exploited more and more of the earth’s natural resources, while other societies were eradicated for their land or their labor.
Fat and rich and better than ever
And here we are now, mostly fat and rich, and dare I say … better than ever … in some of the deepest ways an animal can be better off. The average European family as recently as 1800 lost 3 to 4 children to childhood. Globally, half of all children died. Today, that same European family expects to lose no children, with childhood mortality reduced to 4% worldwide and to less than 1% in the developed world.
Any rational human utility function would readily admit the world has never been better off. For one thing, there are a lot more humans whose utility we must sum: 7.8 billion by last count, that’s up from 1 billion just 100 years ago.
And, no, those 7.8 billion people don’t sum to negative utility. Humans prefer life to death. They mostly are not killing themselves, with suicide rates less than 15 per 1000. They also prefer peace to war, with global battle deaths at all-time lows. Instead of dying by disease, suicide, or war, they insist on living longer, and they mostly do. They consider their lives worth living.
The righteousness of business
In fact, humanity, with all its faults, may well represent the highest form of intelligent life in the cosmos. Elon Musk believes we must achieve space travel lest we risk the destruction of the only intelligent life in the universe due to the loss of a single planet. Science has every reason to believe intelligence is dramatically rarer than planets; therefore, to have the universe’s intelligent life tethered to just one fragile planet may well be morally indefensible. Put another way: our continuation is more important than the planet’s.
If human utility is important and more humans are better than less humans; if we value a peaceful, stable earth where untimely deaths are at all-time lows and life-expectancies are at all-time highs; if we wish for highly educated populations, clean air, and temperate climates; if we believe it would be a shame to squander the only known intelligent life in the universe; then business is righteous.
Business is the only engine that can sustain modern life, feed and educate this many families, and, with excess profits, seek societal goals, whether they be inequality reduction, higher education, space travel, or eradication of disease. The collapse of business would be the collapse of not just the economic order, but of the moral order. Who would fund the hungry? Who would educate the young? Who would save the climate from global warming?
The excess profits from business are the only viable source for funding moral aims.
Capitalist ✌️R✌️evolution?
All of this is not to say business is sufficient for morality. Of course it isn’t. It is society’s role, not an individual business’s, to ensure those excess profits find their way to the proper causes. When society abdicates that role, business will operate without boundaries, the invisible hand guiding to dystopian unchecked accumulation, even accumulating extinctions. But we should not confuse a bug in our currently poorly functioning democracy with the natural end-state of capitalism, whatever that means.
Karl Marx believed the world was in a constant state of becoming, and that to understand societal evolution, you must understand the processes at work today. Perhaps, the world must pass through rampant inequality and unchecked accumulation to reach a state where society wrests control of the excess profits of business from the businesspeople. Engels himself believed that “all earlier forms of society were too poor” for Marxism, and that it was capitalism’s strengths which would enable the next stage of history.
And let’s be clear, capitalism’s strengths are extraordinary: allocating resources with an efficiency that no central planner could match. In fact, the nature of capitalism’s victory has been so complete that China in many ways may be the purest capitalist country today, despite its lip service to communism and its incumbent party croneyism.
Of course, capitalism’s weaknesses are also extraordinary, even apocalyptic. Capitalism does not incorporate indirect costs into the prices of production. It does not value nature, and it is grotesquely shortsighted. Put another way, it leaves costs off the books, just like Enron.
Marx and Engels, so far, were categorically wrong about the outcome: Capitalism has not been supplanted. But the Marx-Engels material dialectic, their focus on processes with each stage of history a reaction to the preceding one, cannot be so easily dismissed.
Capitalism has proven itself flexible through the New Deal and the Great Society, and now, facing the enormity of global warming and spiking levels of inequality, the smart money will continue to bet on capitalism, but, as in the past, with modifications. These modifications may provide a fragrance of revolutionariness, violating our wistful Reagan-Obama era economic sensibilities, but that fragrance is the same-old scent of capitalism’s ongoing transformation to save itself and the economic order from the ash heap of history.
No less a capitalist than the founder of the annual Davos summit for elite bigwigs recently said:
“It is my deep personal conviction that we must move towards a society which is no longer based on production and consumption.” — Davos Founder, Klaus Schwab
His hope is that the Davos World Economic Forum will be a “pioneer in this new social order based on ideals rather than on material values.” Of course, such a statement could be disingenuously woke hooey from the ultimate insider, but it is harder and harder to dismiss the louder and louder cries that the capitalist elite are ignoring the world’s most intractable problems, like global warming and inequality. If they are not up to the task, then there is little choice but to seize the levers of power from the business elite. Climate crisis and oligarchy are an unacceptable conclusion to the American story.
Andrew Yang, Machiavellian?
Whether that seizing is orderly or not depends on whether the major political parties, or a new one, can co-opt these concerns into a coherent vision. The US-presidential candidate Yang may have been the most prescient, if not the most revolutionary. His call for universal basic income was downright Machiavellian.
Machiavelli realized the many are the source of political power and counseled the prince to make them dependent on his security. What is universal basic income but an extension of security by the politically powerful few to the relatively powerless many?
The ongoing coronavirus crisis has underscored the wisdom of universal basic income, something we are now approaching with pandemic cash grants and enhanced unemployment insurance. Yang also advocated for investing in outcomes, treating people equally, allowing for merit, and that it is important to have a “common cultural context and even … a common language of expression.”
Little of that is particularly revolutionary. The powers that be must soon realize that by not embracing reasonable voices they risk all of their wealth and power, rather than a modicum of it.
If $1,000 a month in basic income could forestall a Marxist revolt for a few more decades, who in power would not pay it? Eh, comrades, eh? But with the right political modifications to check the excesses and failures of capitalism, that revolt may never come.
Rather than filling the gold vaults of a handful of Scrooge McDucks, capitalism can be the moral foundation for a golden age of human flourishing. The “invisible hand” could be made to work toward an end, rather than to unending consumption and accumulation. The trick is leveraging excess profits to achieve moral societal goals.
Since the commercial emergence of the Internet and its inherent network effects, it has been possible to accumulate wealth faster than ever. Rather than investing in land and capital equipment like trucks and mining drills over the course of a lifetime to build a significant business, the capitalist now can hire a team of a few dozen people and, in a matter of a few years, build a company worth $16 billion, or he can build a $700 billion monopolist from his dorm room.
As wealth has accumulated, checks on wealth’s political power have been removed. Money is now speech and worthy of first-amendment protections. If it is speech, it swears, or worse, it yells “fire” in a crowded theater; it corrupts the very fabric of the state, endangering it. In the hands of the superrich, wealth is straight-forwardly a negative externality. As I’ve argued before, it is accumulated in only one way: through the exploitation of unpaid work. The time has long past for society to find the political will to demand the bill for the unpaid work be paid.
But we must find a way to redress the imbalance of wealth and power in a way that unifies, rather than divides, the American story of what the republic can become. Washington understood, and committed in his Farewell Address, to warning against partisanship, and to entreaties that we are stronger together, that unity is the most fundamental attribute of what it means to be American. Lincoln picked up that mantle and convinced hundreds of thousands of northerners to die to kill hundreds of thousands of southerners, all to protect the idea of an eighty-year old union.
It is not American — it does not form a more perfect union — to pit the rich against the poor, the sick against the well, the educated against the uneducated. The purpose of a shared story is that it be shared. The American story today is fractured; a leader is required to cohere it and that story must involve restraining wealth’s corruption of political power. That leader must be the model of personal restraint. Like Washington laying down arms and then later stepping away from the Presidency, that leader must realize restraint is not just virtuous but required to keep the many from writing the few out of their narrative.
Needless to say, that leader has not yet emerged 🙃. Nevertheless, I would take these problems of the current moment over the problems of any previous moment. Our self-aware being awakened on the right planet at the right time. She can start a business and keep the engine humming, or she can organize, educate, and lead, directing those excess profits toward goals consistent with a livable society. She can accept the bestowal of riches with moral responsibility and with deep appreciation for the remarkable nature of being.
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