Capitalism's unmatched history of failure
If there is one constant in the areas of politics and economics, it's that the facts are unwelcome. This is especially true when the conversation turns to capitalism.
The cheerleaders of capitalism like to muddy the waters by taking credit for things they didn't do.
For instance, just look at that marvel of modern capitalism - the iPhone. Virtually all of the technologies that make up the iPhone were developed by the Department of Defense, and that's only a start.
The parts of the smart phone that make it smart—GPS, touch screens, the Internet—were advanced by the Defense Department. Tesla’s battery technologies and solar panels came out of a grant from the U.S. Department of Energy. Google’s search engine algorithm was boosted by a National Science Foundation innovation. Many innovative new drugs have come out of NIH research.
Very little scientific innovation has ever come from capitalism.
The primary failure of capitalism is it's inability to achieve it's most basic reason to exist.
I'm speaking of the frequently repeated claim about how capitalism has lifted so many millions out of extreme poverty over the past 30 years. First of all, the claim is completely false.
we see that the number of people living under this line has increased dramatically since measurements began in 1981, reaching some 4.2 billion people today. Suddenly the happy Davos narrative melts away.
Moreover, the few gains that have been made have virtually all happened in one place: China. It is disingenuous, then, for the likes of Gates and Pinker to claim these gains as victories for Washington-consensus neoliberalism. Take China out of the equation, and the numbers look even worse. Over the four decades since 1981, not only has the number of people in poverty gone up, the proportion of people in poverty has remained stagnant at about 60%.
It's actually even worse than that, because one of the few regions besides China to reduce poverty in the post-Cold War period was Latin America, and their success was almost entirely due to a turn toward mild socialism.
What's more, the World Bank, when faced with reports showing that extreme poverty in the world is increasing, has simply changed the criteria at the last minute in order to force the numbers to reflect the politics.
“the absolute number of those living on $1 per day or less continues to increase. The worldwide total rose from 1.2 billion in 1987 to 1.5 billion today and, if recent trends persist, will reach 1.9 billion by 2015.”
- World Bank in its 2000 annual report, right before it changed the criteria and poverty magically dropped by 400 million
So if capitalism isn't lifting the poor out of poverty then what good is it? If the objective was to make the rich more wealthy, we already had that covered with feudalism, fascism, oligarchism, and lots of other 'isms'.
There was no need for yet another system to make the wealthy more obscenely wealthy.
At this point the proponents will always point out the history of failures of socialism.
While they do so they almost always fail in three distinct ways:
1. Almost without exception they can never correctly define socialism. Generally their "definition" of socialism is just another way of saying "icky" or "scary". If they can give a coherent response they'll say something to the effect of "socialism is Big Government".
At that point I like to point out that "Anarchism is socialism" and watch their heads explode.
2. The "history of failures of socialism" implies that socialism always fails by itself. I like to challenge the capitalists to point out a socialist country that wasn't attacked politically, economically, and militarily by capitalist nations. There was none. They all collapsed under the violence and brutality of capitalist interests.
3. The cheerleaders of capitalism are almost without exception largely ignorant of real history.
They often call themselves libertarian, while being ignorant that Libertarianism is a socialist term.
They almost always deny the clear connection between capitalism and the slave trade.
They often cite an exaggerated number of victims of communism, but have never even considered that the number of victims of capitalism is infinitely larger even by conservative estimates.
Cheerleaders of capitalism will, in every instance of economic failure, excuse capitalism by blaming the government. All it requires is the very existence of the government. The assumption being that everything the government does can't help but be negative, no evidence required.
The thing is, we can measure this, and capitalism doesn't come out looking good.
Let's start with the deregulation movement that started in the 1970's.
The mantra preached by most lobbyists was that economic regulation was outmoded and market self-regulation should be the norm. The idea they espoused was that government regulation impedes the natural laws of supply and demand, which ultimately increases cost to consumers. They insisted that deregulation would create more competition and thus lower prices for consumers.
...When the Airline Deregulation Act of 1978 passed, there were 43 airline companies. By 2013, there were only nine.
...Deregulation also led to poor services and many customer complaints. In 1978, all tickets were refundable, you could change flights with no penalties, travelers would be compensated for canceled flights, seats had more leg room, meals were free, and checking bags was free.
On top of that, unions were gutted. worker were treated worse, and hundreds of thousands were fired. Just four airlines had virtual local monopolies.
This same experience was repeated everywhere.
The Motor Carrier Act of 1978 deregulated the trucking industry.
100 large companies went out of business and 150,000 people lost their good-paying jobs.
In 1996, a bipartisan Congress deregulated agriculture. Many farmers and agribusiness interests supported the bill.
But for family farmers, the Omnibus Farm Bill – and the export-led growth strategy upon which it was based – has been a massive failure. The U.S. farm trade balance declined by more than $13 billion between 1996 and 1998, and prices have plummeted. August U.S. corn prices fell from $4.30 per bushel in 1996 to $1.89 in 1998, or 56%. Wheat prices fell from $4.57 per bushel in 1996 to $2.46 in 1998, a drop of 46%.
The combination of export dependence and deregulation have left increased numbers of family farmers facing extinction. At the same time, U.S. agriculture becomes more centralized in the hands of large farms and national and multinational companies.
The list of deregulation bills are too many to list. The Bus Regulatory Reform Act, The Surface Freight Forwarder Deregulation Acts, the Ocean Shipping Reform Act, the Energy Policy Act of 1992, the Telecommunications Act of 1996, just to name a few.
However, the most disastrous deregulation was the financial industry.
The new securitization became globalized and eventually affected the world economy. The speculation and lack of effective regulation eventually led to the crash of 2007 and The Great Recession.
Most people think that the big bank bailout was the $700 billion that the U.S. Treasury Department used to save the banks during the financial crash in September of 2008. But the bailout is ongoing. According to the Center for Media and Democracy, $4.6 trillion has been paid out by the government and trillions of dollars are still committed. Yes, trillions not billions, and the banks are now larger and still too big to fail...The 12 largest banks now control 70% of all bank assets.
In almost every instance, deregulation was disastrous for the workers in those industries, created poorer quality products and/or services for consumers, and led to massive consolidation. The opposite of what capitalists promised.
The next level we need to look at is privatization, which is not new to this country.
Moshe Adler's research on privatization in the 19th Century shows a pattern of corruption, poor quality, and failure to provide services the public had paid for.
Nevertheless, with the Reagan Administration we decided to try privatization again, because capitalism.
A 2007 survey found that over half of the local governments that placed services back under public control did so because privatization didn’t cut costs. After Iowa hired insurance corporations to manage its Medicaid program in 2017, the average cost of insuring people climbed nearly three times as fast as when it was under public control. An Indiana toll-road built using private financing — known as a “public-private partnership” — launched in 2014 by then-Gov. Mike Pence turned out to be $137.3 million more expensive than if the state had used traditional public financing. Charter schools, which are publicly funded but privately operated, are costing San Diego’s school district $65.9 million a year. And then there’s healthcare, an area where the United States spends twice as much as other countries thanks to a “free market” of private doctors, nurses, hospitals and drugs.
...In fact, the decades-long campaign to push privatization policies has gone hand-in-hand with efforts to slash taxes on the wealthy, bust unions and target the rights of working people.
Privatization efforts are generally based on ideology rather than evidence, and have caused harm to vital public services and infrastructure.
Capitalists are united in denying these obvious facts. Not because they are liars, but because they are indoctrinated.
Finally, we have the Holy Grail of capitalism - Free Trade.
whatever measures you use, the data shows that free trade agreements (FTAs) have been a disaster for U.S. trade and the U.S. economy. In the last 25 years, our trade position with our two NAFTA partners has changed from rough balance in 1992 to a whopping huge deficit of $160 billion last year.
...And it’s not just NAFTA. After the Korean-US trade agreement was approved in 2011, our trade deficit with Korea more than doubled to $32 billion on the narrower measure last year--or $28 billion on the wider measure.
While we don't have an FTA with China, granting China Most Favored Trade status in 2000 and bringing them into the WTO, dropped tariffs to nil. The outcome has been apocalyptic for the working class.
The growth of the U.S. trade deficit with China between 2001 and 2018 was responsible for the loss of 3.7 million U.S. jobs...Three-fourths (75.4%) of the jobs lost between 2001 and 2018 were in manufacturing (2.8 million manufacturing jobs lost due to the growth in the trade deficit with China).
...U.S. proponents of admitting China into the World Trade Organization frequently claimed that letting China into the WTO would increase U.S. exports, shrink the U.S. trade deficit with China, and create jobs in the United States.
Time and time again, capitalists have promised the opposite of what was delivered, and the working class suffered because of it. And it was all easy to predict. Labor unions fought it every step of the way, but those in charge didn't want to listen.
I found this article in the 1986 Harvard Business Review.
We have elevated the economic theory of free trade to the status of a national theology, and we follow its simple dictums as if they were immutable laws. We appear prepared to follow the precepts of free trade wherever they lead us, even if that means plunging lemminglike to our economic ruin.
Today the evidence should be clear to anyone who wants to look at it: our blind allegiance to free trade threatens our national standard of living and our economic future. By sacrificing our home market on the altar of free trade, we are condemning ourselves and our children to a future of fewer competitive businesses, fewer good jobs, less opportunity, and a lower standard of living.
All unquestionably true, and all have come to pass.
Yet like our wars, failure is never something that must be acknowledged, much less punished.
When push comes to shove, the capitalist will simply deny that capitalism ever existed.
However, there is no capitalist country anywhere in the world today. The closest was the 19th century America, but even there capitalism was not pure. It was adulterated by the governments’ interference in the economy. So there hardly could haven been any “victims” of capitalism then, and there cannot be any today.
More fundamentally, there cannot be victims of capitalism because the concept is a contradiction....
as Ayn Rand explained, capitalism is a system in which the initiation of physical force and fraud is banned, as both violate the rights of individuals.
Under capitalism, only the government can use force—but exclusively in retaliation against its initiators, such as terrorists and other criminals. Therefore, such a social system has no victims: capitalism is the only victimless social system.
What is being described here is Utopia, not capitalism. If you look up the definition of Utopia you will find "an impractical scheme for social improvement; an imaginary and indefinitely remote place".
Nothing written here is even remotely close to the definition of capitalism, nor it's history. This "definition" of capitalism is useless. When you encounter these people, just understand that you are dealing with a religion.