Imagine the most comically absurd capitalist thing you can think of. Go ahead. Double it. OK — ready? How about this one: a nation of people who are mostly broke, living paycheck-to-paycheck, who’ll never retire, barely able to afford decent healthcare…subsidizing, by billions, the world’s — scratch that, history’s — richest man. Absurd enough for you?

And yet that’s American reality. It’s essentially what massive “incentives” for Amazon’s new HQ means. So why are Americans — who live at the edge of ruin — subsidizing the world’s richest man, who’s also probably history’s richest man, to the tune of billions — instead of him investing in them, their healthcare, educations, retirements, and so forth? Let me put that another way.

Could there be a better example of the abject failure of capitalism — and what it really is — than the world’s richest man asking for yet more money from broke Americans (LOL)? I mean, he’s already…the world’s richest man! Are you seeing the comical absurdity of the situation? (When you think about it, contained within that single example is the sequence of American collapse — inequality so steep a society can no longer afford to invest in basic things like healthcare or education, people whose lives are melting down turning on their neighbours and peers, turning to extremism, fanaticism, embracing authoritarian meltdown.)

But it’s not just funny. It’s a failure. Not just one of ethics or morals — capitalism doesn’t have any. It’s the result of the stunning, catastrophic failure of an outdated set of ideas about how societies grow and prosper.

After all, it also proves a few crucial things about capitalism, too, doesn’t it? At least at the mega scale — not the human, micro scale of your local pub or barber or bakery, which is very, very different. Let’s start at zero: capitalism isn’t the platonic ideal of self-correcting competition — that’s a fantasy, a fairy tale. This is the self-evidentreality of capitalism — monopolies extracting wealth. How much? Well, first, no amount of wealth will ever be enough — not even the most wealth in human history is. There is no boundary condition, no point of satiation, which means there is also no line of conscience or morality. So, second, capitalism will never do the “right thing” — aka in this case, help a broken society build the systems it desperately needs — out of the kindness of its heart, because it doesn’t have one. Third, capitalism’s central principle is to exploit — which means that I take as much as I possibly can get away with, from you. Who’s being exploited in this case? Not Amazon workers, but average Americans, who are being held to ransom, for even more money, by…the world’s richest man. LOL.

(And that brings me to a point that America, especially, hasn’t reckoned with. Societies have turning points on the way to maturity, and one of the most crucial for a modern one is to grapple with the difficult truth that capitalism at the mega scale is a harmful, abusive system, whose greed is boundless, literally never-ending — instead of pretending, as immature societies often do, that capitalism is some kind of noble and virtuous contest. America goes on, thanks to generations of badly mistaken intellectuals, notably economists, avoiding this simple, self-evident fact, instead of just understanding it. Yet when the truth of capitalism isn’t reckoned with, then a society simply stops being able to grow and prosper — just as America has. Why? Because then a society can never go beyond capitalism, either.)

The American idea of how societies grow and prosper goes like this. In order to fund social investment, you need capitalism. You tax the capitalists, and hey presto — then and only then do you have money to invest in schools, roads, hospitals, and so on. (Now, it’s obvious to see that there are many flaws with this theory. In order for capitalism to earn more, it will have to exploit more people, or exploit people more — and so in the end, will it just be a wash? And who will decide what the adequate level of such public goods is? In America, it’s capitalists — not people: they essentially dictate terms to the polity. Now, note the assumption here: the only way a society grows is through capitalism, and that means that capitalists, too, have the power to withhold prosperity from a society — and that way, to hold it ransom. What if they decide to do that?)

The biggest flaw with this theory is one of power. If capitalists know that a society depends on them to “fund” it, then they’ll probably demand some kind of payment in order to operate in a society in the first place — hence, incentives. And the payment they demand — since capitalism is only concerned with how much money it makes, period, full stop — will be precisely equivalent to the taxes that are raised. (If all this sounds suspiciously like a shakedown to you, you’re not wrong — the real question is why decades of American thinking has glorified it as some kind of grand intellectual breakthrough.) What’s the effect of that ? That means that in a capitalist society, the level of public investment will never really rise — translation: people will never really have more or better healthcare, incomes, savings, retirements, choices, chances, and so on.

And that is precisely, exactly, eerily what happened in America, isn’t it? The capitalists won, by stripping society of investment, and everyone else lost. How much? So much so that Americans are now subsidizing the world’s richest man, who is also probably history’s richest man, so he gets even richer — while 80% of them live paycheck to paycheck, go without decent healthcare, retirement, are broke, unable to raise $1000 in savings, and have never had a raise in their adult lifetimes. LOL. How much more backwards can an economy be? This is Soviet levels of folly, my friends.

And yet so far, we’ve made the same mistake American economists have — we haven’t asked, simply: wait, is this theory even true? Do societies really need more capitalism to pay for more healthcare, education, retirement, childcare, and so on? Or is all that just some kind of weird, backwards myth — maybe even one advanced by capitalists, so they can hold us all to ransom? After all, this approach seems to have backfired so spectacularly in America that Americans are paying the world’s richest man even more, but they are the ones going without decent healthcare, education, media, retirement, and so on.

So does society-need-capitalism, or does capitalism-need-society? You see, if the theory that society-needs-capitalism is true, then we’d see a very specific pattern at work in the world. Societies with higher levels of all those nice and wonderful things would have more and bigger capitalism, not less — because capitalism is the thing which would be funding all those gleaming hospitals, universities, schools, roads, not to mention retirement and childcare systems and so forth. So is that pattern — more public goods require more capitalism — what we do see, in the real world? Of course not. We see precisely the opposite, in fact.

Europeans live vastly better lives — longer, happier, richer, wealthier in every regard than Americans — because they spend twice as much on public investment as a share of GDP — 50% versus 25%. Translation — they spend twice as much on healthcare, education, retirement, childcare systems, safety nets, and so on — which also means they spend less on capitalism. Europeans have far better healthcare and retirement and education and everything systems — but there are no Apples and Amazons in Europe — there’s not a single trillion dollar company, in fact. So the American theory that society-needs-capitalism in a kind of linear relationship to grow and prosper is obviously false — we can disprove it merely by glancing at the world. Isn’t that funny? Strange? Weird? (Why don’t American intellectuals ask such questions? But I digress.)

So why didn’t Europe buy into the theory that society-needs-capitalism? Because it was already developing the opposite one — capitalism-needs-society. The European theory goes like this: social investment can be self-sustaining. Imagine that you work at a national healthcare system somewhere in Europe, as a doctor, or a nurse. It’s not that you don’t pay taxes — of course you do. Your taxes then go right back to fund all those other various social services. But the people who work in those sectors are funding you, too. Everyone is simply investing in everyone else. There’s no magic behind it — you can simply think of it like a shared insurance pool, which is exactly what it mostly is. Together, all that adds up to about half the economy — a much more balanced model than America.

Now, all those people who are investing in one another can go out and spend some of their money on capitalism. But note the effect — now a society has a stable, large, and readily available pool of secure, well-paid, middle class jobs with benefits. So there is always an alternative to capitalism — unlike in America, where the choice is between different flavors of exploitation, in Europe, it’s often between being exploited by some capitalist, and working for the common good. And because people are free to make that choice, which also means they are investing in their own growth and development, capitalism can never really hold such a society hostage like it can in the States. Let me put that another way.

In European thinking, a society doesn’t have to depend solely on capitalism for its growth and prosperity. In fact, it mustn’t — because capitalism will hold it to ransom, and demand that people subsidize capitalists, not matter how rich they grow — which is how you get to the world’s richest man demanding even more money (LOL) from Americans. How to escape that dilemma? A society can simply invest in itself — and kickstart a virtuous circle that lifts everyone upwards, because here, no one is exploiting anyone else. (Of course, there are the usual conditions of economics — if such a country imports too much, it will grow poor, if such a country doesn’t keep lifting the quality of what it produces, it will stagnate, and so forth — but those conditions apply to everyone).

It’s through bizarre, strange, upside-down examples like this one — the world’s richest man asking for more money from a nation whose middle class has collapsed, where people choose between healthcare and food — that we see the hard, grim, and dismal truths of capitalism. What it is, without the myths and fables and fairy tales. It’s contradictions, it’s limitations, at what scale it is useful and helpful — and how it becomes abusive and self-destructive to a society. As in life, it’s by facing up to those difficult, uncompromising truths that we grow and mature. That difficult reckoning about capitalism — a system it has too long glorified, into a kind of Soviet ideology — if you ask me, is one of America’s greatest challenges today. After all — like I asked you at the beginning: how much more absurd can capitalism get?

Umair

November 2018