Mark Fisher, the author of Capitalist Realism, famously said that “It’s easier to imagine the end of the world than the end of capitalism.” Yet capitalism is also the bogeyman for a lot of people, especially on the left, though if you go far enough to the right there is a loss of faith in capitalism as well. Just like the libertarian capitalist acolytes can find any way to make all of society’s ills out to be the fault of the government, everyone else have come up with no shortage of ways to lay all our problems at the feet of capitalism. Such intoxicating clarity has aided in simplifying the world for a great many people. But is capitalism as evil as they say?
This post was inspired by the following video:
Just to confess my own biases before continuing, I once counted myself among those libertarian acolytes of capitalism. While I no longer imbibe of that heady ideology, I am still of a mind that something at least capitalist adjacent is the least terrible of the alternatives on offer. I hope some better idea makes itself known, but until then I’ll trust the data of the twentieth century that far left and far right alternatives are far more harmful than the problems they purport to solve.
In the above video, host Michael Burns takes the definition of capitalism as being the pursuit of maximizing profit. This is of course construed as the rich getting richer on the backs of wage slaves. Of course, the obscenely rich make for good effigies when pointing out the flaws of capitalism. But it’s not just the rich who seek to maximize profits. Everyone seeks to maximize profit. It’s why people shop at Amazon rather than brick and mortar stores: it’s cheaper, and so people get more stuff for less money. That is maximizing profit.
If capitalist philosophy had a foundational principle, it would be that individuals ought to be allowed to to as they please with their own money. It’s from this that, for instance, aversion to taxes arises: the money taken as taxes is money that the individual earned by their own labor or entrepreneurship, and therefore it is preventing said person from doing what they please with their own money when it is taken by the government as taxes. It’s also from this foundational principle that marketplace competition arises, because people ought to be free to do as they please with their money, and so they can take their patronage wherever they so choose. It is their own maximization of personal profit that compels them to patronize those firms that will give them the best product for the least amount of money (i.e., where the benefit (product quality) and cost (in literal money) intersect for that particular individual).
It is from this principle of a person being permitted to do what they wish with their own money that we get the subjective theory of value: the value of goods and services is whatever people are willing to spend on them. You could work really hard making something, and believe that it’s value is very high, but if nobody is willing to spend that much on it, then it is not actually worth that much (i.e., the labor theory of value is trumped by the subjective theory of value). It is through this subjective valuation that people make decisions about how to spend their money.
These nice philosophical theories do not always work out so well in practice. For instance, the collective action problem means that people will repeatedly do those things that benefit themselves in the short term, meaning that many long term problems go un-addressed (e.g., climate change). We’re all guilty of thinking that goes like: “such-and-such should be stopped! But…if only I stop doing it, that won’t make the problem go away and it will only hurt me, so I’ll keep doing it and hope someone else stops it from happening.” Again, climate change is a great case-in-point, but even things like shopping on Amazon count as well: the things Amazon does is shady and probably extremely harmful, but if only I stop using Amazon, Jeff Bezos likely won’t notice and it’ll only make things harder for myself. As such, my incentive is to keep using Amazon when I want to buy things in order to maximize my personal profit (acquiring more products for less money).
The collective action problem is probably one of the biggest flaws in capitalism. But the collective action problem stems from the sort of short-term thinking that is part and parcel of capitalism (and also of democracy, where frequent elections incentivizes short term solutions). Of course, the capitalist faith in endless “growth” (e.g., of GDP or growth in shareholder stock value) is shortsighted. But again it is not just corporations who are at fault. We all buy things knowing they have only a short time use, from phones we know will be obsolete in a year, to clothes we know are cheap and disposable, to plastic water bottles that we use for a few minutes and then toss away to linger as pollution for hundreds or thousands of years. Yet every time some new widget becomes popular enough, it gets elevated to the status of a human right that nobody should have to go without (e.g., the internet).
Are the immoral (or at least amoral) things I’ve been describing the fault of capitalism? These are the actions of people. Human behavior within incentive structures. I tend to be of a mind that social entities supervene on the psychologies of individuals. In other words, to say that “capitalism is to blame” or “communism is to blame” or “Islamism is to blame” is like saying that “Amazon is to blame” or “the government is to blame”. All these things are just collections of people working within incentive structures, the incentive structures themselves supervening on the individual psychologies of people (e.g., maximizing profit is only an incentive because enough people believe that money has value; social esteem is only an incentive because evolution has instilled human psychology with a yearning for the respect of others). So the question becomes: what sorts of incentive structures should we adopt?
Setting aside what it would even mean for some committee of people to decide upon and engineer the incentive structures of our society, what we need to do is take a sober look at how humans respond to certain incentives. To do this I am going to make a binary distinction between to broad incentive structure types. The first is what I will call ideological and the second is what I will call egoist. In the former, incentives are broadly geared toward some transpersonal abstraction shared in the minds of multiple people. In the latter, incentives are broadly geared toward concrete individual flourishing. Examples of the ideological incentive structures would be religion and political ideologies such as fascism, communism, nationalism, libertarianism, and so on. In this type of incentive structure, people work in the service of the ideology, where individual human flourishing is secondary to some vision of society or the good. In the egoist type of incentive structure, capitalism is the quintessential example, where each person pursues their own self-interest, primarily based on the pleasure principle.
Ideology incentive structures tend to revolve around the social esteem incentive. Since material incentives are not as important, and are often downplayed within the doctrine of the ideology, the adherents seek out the esteem of fellow adherents. The social esteem incentive is often determined by the strength of one’s adherence to the doctrine, which is why virtue signaling and purity testing are common within ideologies. This can lead either to people leaving the ideology, since working within such incentive structures can be personally taxing, which thereby renders the ideology impotent; or it can lead to people becoming more radicalized in their fervor to demonstrate their commitment to the ideology, thus leading to greater willingness to commit atrocities in the name of the ideology, as is what happened in many religions during the last two millennia and in twentieth century communist and fascist societies.
Of course, once an ideology is actually implemented, egoist incentives have a tendency to arise in the form of corruption and/or black marketeering.
Egoist incentive structures, such as capitalism, tend to incentivize consumerism and what I call our schizoid society. People are driven by short term pleasures, always seeking to maximize the number of pleasurable subjective states. This leads to what I mentioned above with the collective action problem: people are much less willing to take on some immediate discomforts for the sake of long-term benefits (e.g., wearing masks to slow the spread of COVID). People take on pleasurable beliefs. They seek out untrammeled freedom from the burdens of any sorts of commitments (e.g., family, community, religions), or even the perceived shackles of biology. This inevitably leads to the ennui and loneliness of so-called late capitalism, or to people turning to ideologies to escape the shallow pleasures of the egoist incentive structure.
If this sounds bleak, it’s because it is. As I said above, to blame “capitalism” for the ills of our neoliberal world order is like blaming a corporation for their unsavory activities: these things are just people (the banality of evil). And once these abstractions are peeled away, it is human beings who are the problem. Implementing a different incentive structure will not solve the issue that all such incentive structures must run on the operating system of human psychology. We did not evolve to live in a world of technological, large-scale societies, where we are constantly bombarded with propaganda and information irrelevant to our day-to-day lives, and with politicians, bureaucrats, and business executives as self-interested as ourselves (and with no knowledge of our concrete individual existence) enacting policies based on incomplete information and within incentive structures different from our own. The notion that if we just put these same people, running the same psychological operating systems, into some different incentive structure (designed and administered by yet other human beings) that we can make things better is prodigiously naive.