Tuesday 16 February 2016

Capitalism’s Comforter: The Myth That The Free-Market Has Liberated Humanity.

The Choice Fruits Of Capitalism: The Right delights in claiming that the dramatic improvements in the lot of ordinary people in the quarter-century since the fall of the Soviet Union, far from being the result of clean water, mass education and mounting political pressures from below, are to be attributed to the beneficence of free-market capitalism. And yet, wherever untrammelled FMC has been installed - as in the Russian Federation under Yeltsin, or in US-occupied Iraq - the results have been catastrophic.
IT’S THE RIGHT’S COMFORT BLANKET. Pressed to present a moral justification for their politics, it’s what they reach for. The unquestionable progress of humanity: out of poverty, ignorance and injustice, and towards prosperity, education and more equitable social arrangements; is held up as proof that their ideology works. They are particularly struck by the global improvements that have taken place in the quarter-century since the collapse of “actually existing socialism” in Russia and Eastern Europe. Capitalism, they insist, is not just good for capitalists – it’s good for everyone.
It’s nonsense, of course, but the weakness of the argument is not always apparent to those lacking a strong grasp of modern history. The Right’s trick is to conflate the dramatic expansion in human knowledge and technological prowess with the rise of the capitalist economic system. Only a fool would argue that the two occurrences were not closely related, but it would be much more foolish to claim that the latter caused the former.
Advances in agriculture, engineering and medicine have indisputably contributed the most to human welfare. The average human-being lives longer and in much greater health than his or her ancestors, not because they had capitalism imposed upon them, but because civil engineers made possible the supply of pure drinking water, and the safe disposal of dangerous waste. The discoveries of scientists and physicians similarly extended human life-expectancy and vastly increased the productivity of just about every aspect of agricultural activity.
The history of capitalism is by no means the story of how these scientific and technological advances were harmoniously integrated into its constant quest for increased profits. Improvements in the quality of life of ordinary people were often made in the teeth of fierce capitalist opposition. Even today, attempts by governments around the world to regulate the worst aspects of capitalist profit-seeking are resisted at every turn.
Nevertheless, the steady advancement of humanity has proceeded apace. Not because the big-hearted capitalists have been demanding that their workers be given the best of everything, but because workers and peasants around the world have insisted on translating advances in science and technology into measurable social progress for themselves and their children.
Almost always this has been achieved by mass political movements harnessing the power of the state to institute mass public education, health and welfare programmes. If the big capitalist corporations sometimes deigned to get out of their way it was only because they realised that the processes of globalisation proceeded more smoothly (and profitably) if the peasants they were enrolling in their vast new sweatshops knew how to read and write, and if the inevitable injuries they suffered could be patched-up at the host nation’s expense.
Nor should the impact of international institutions such as the United Nations, the World Health Organisation, the Food and Agricultural Organisation, the Save the Children Fund, the United Nations Educational, Scientific and Cultural Organisation, the United Nations Relief and Works Agency, and the International Labour Organisation be underestimated. The humanitarian and social-democratic impulses which gave these global agencies of human progress birth, and which for more than 70 years have kept the flag of true internationalism flying, have been the targets of unrelenting right-wing hostility.
It was the capitalist triumphalism inspired by the fall of the Soviet Union, however, that stuck (and still sticks) in the throat of left-wingers the world around. To hear them talk, one could be forgiven for thinking that the Union of Soviet Socialist Republics had succumbed to a vast horde of right-wing ideologues brandishing copies of The Economist and The National Review. That the Berlin Wall was toppled by Baroness Thatcher – rather than a border guard who refused to open fire on his fellow citizens. Strange, too, how the Right has forgotten that it was Mikhail Gorbachev, not Ronald Reagan, who set the wheels of political and economic reform in motion, and Boris Yeltsin who turned back the coup-plotters’ tanks without a shot being fired.
What they have also forgotten, and what fundamentally undercuts all their boasts about the advances of the last quarter-century being driven by the forces of benevolent capitalist internationalism, is the fate of the Russian people after the fall of the Soviet Union. The United States was quick to offer the new Russian Federation all the advice it needed to apply what Washington insisted was absolutely necessary “shock therapy” to the moribund Russian economy. This was capitalism in its purest form: unpolluted by the slightest taint of socialism, or even social-democracy! And what was the result? What sort of society emerged from this capitalistic “Year Zero”?
The answer is that Russia was transformed into a vicious kleptocracy in which bribery, corruption and outright gangsterism rode roughshod over every economic principle Adam Smith ever enunciated. A system which had only just managed to work under the Communists, very quickly ceased to work at all. Unemployment, homelessness and alcoholism soared and even those fortunate enough to keep their jobs and their apartments were lucky to get paid once a month or keep the power on. Most tellingly, human life expectancy – that great reflector of the advances of the modern era – began to fall.
This is what happens to a country to which the principles of pure free-market capitalism are applied.
So, the next time a right-winger reaches for this spurious comfort blanket, remind him that while Capitalism may be correlated with the economic, social and political progress of humankind, any and all claims that it is the cause of our species’ advancement must be rejected as historically and morally unsustainable.
This essay was originally posted on The Daily Blog of Monday, 15 February 2016.


Anonymous said...

Get out of the wrong side of bed this morning? :)

This post contains elements of truth, but is mostly a caricature.
Popular history (Reagan faced down the commies!) is always a caricature, whatever its politics.

Using Russia as an example in anything political or economic over the last 300 years is a bad idea. They have always made a huge mess of things, while looking Westward with envy and paranoia.
The left would do well to remember that.
The Soviet Union was the logical conclusion of the Marxist fantasy, applied with Russian paranoia and zeal.
The current kleptocracy is the result of a power vacuum, and no history of or respect for representative democracy or judicial independence.

The Chinese have similar moral issues, but more pragmatism and less of an inferiority complex. Their economic boom has moved (at minimum) 10s of millions out of poverty.
See also India. How many Chinese and Indian famines have their been recently?
The left studiously ignores this.
Their lives of most of these may be poor compared to ours, but they are an improve ment on what came before.
I do not defend the opressive Chinese one party state. I do observe their recentish economic success, since they abandoned communism in all but name.
And I note you fondness for quoting Chinese communists.

This is why capitalism succeeds. It can and does lift people out of poverty.
It is fantastic at generating wealth, esp with free trade.
Less good at distributing wealth, but at least it gives wealth to distribute. Most western countries have welfare states and taxation to do this.
The NZ welfare, health, education budget is as big as it has ever been.

Sure, the welfare state may need improving. And sure, corporations are always going to act in their own interests. These aren't revelations. Organisations nearly always act in their own interest, be they corporation or state apparatus.
And there is always a need for strong and fair regulation, esp wrt things like banks.

I sometimes think the left would be most pleased with everyone equal and poor.

I know you've been asked this before, but what IS your idea of how a fair modern society should be organised?
More state control of industry?
Compulsory unionism?
Free tertiary education? I'd probably agree on this, if you stop people doing bullshit degrees for social reasons.
Less immigration?
More state houses?
More tax?
Land reform? I'd agree to this, the RMA is a is disaster

Guerilla Surgeon said...

"The Soviet Union was the logical conclusion of the Marxist fantasy, applied with Russian paranoia and zeal." – Caricature

"The current kleptocracy is the result of a power vacuum, and no history of or respect for representative democracy or judicial independence." – Caricature

"See also India. How many Chinese and Indian famines have their been recently? – Caricature, India in particular has not had a famine for a long time but was hardly capitalist.

"This is why capitalism succeeds. It can and does lift people out of poverty."
I think Chris's point is that correlation is not necessarily causation.

"I sometimes think the left would be most pleased with everyone equal and poor." – Caricature, certainly not true of any left-wing people I know.

bob said...

Thing is Chris, you assume that you have a good grasp of history, but from where I stand, your view of history is horribly warped by the prism that you insist on looking at the world through.

eg, You say "Almost always this has been achieved by mass political movements harnessing the power of the state to institute mass public education, health and welfare programmes"

I would say "mass political movements have done more harm than good - by a long long way"

As for your characterisation of Russia as the end-result of capitalism? Haha. No, that's what happens when corruption and lawlessness is coupled with a lack of proper democracy - hardly the first time that's happened. To suggest that's capitalism's fault is hilarious.

greywarbler said...

I don't find your arguments credible. It would be true that yours and Chris's view of history shows distinct differences.

If you disagree about the value of mass political movements to the extent of saying they 'have done more harm than good - by a long way' then I want some example. What do you refer to when heartily disagreeing. Your opinion doesn't carry any weight without that.

As for Russia's bad position, any large change in political systems enables ruffians and rorters to find juicy pickings. That's what happened here when the RW monetised the country and started carving off the state assets for sale. Some of our richest men managed to get them for a song and proceeded to use them as catalysts to a large fortune.

Democracry doesn't stop that, it only succeeds when there is stability in a country, and a commitment by government and the politicians and business leaders to answer to the people. Democracy must always be undergoing repairs, as it is not as robust as people think.

Guerilla Surgeon said...

"To suggest that's capitalism's fault is hilarious."

To suggest that it's a simple case of lawlessness and lack of proper democracy is ridiculous.

David Stone said...

Hi Chris
It depressed me at the time that when Gorbachev extraordinarily dismantled the power structure beneath him to allow a more democratic regime to develop , acknowledged the failure of an economy completely decreed by authority , rather than progressing by steps to allow more freedom and entrepreneurship to develop Russia had to go to the most extreme proponents of neoliberal capitalism , at neoliberalism's zenith, for guidance. It was a tragic move from the sublime to the ridiculous .
People seem to expect a change in economic policy to have an instantaneous effect, but it doesn't, it takes decades when your looking at a global stage. So the success of capitalism that neoliberals like Wayne Mapp claim for the polices since the 80s are actually the result of the pragmatic Keynsian management during the generation previous. The effects of the neoliberal era are what we are seeing now and will experience during the next few decades.
I don't think any system should be thought of as socialism, that society as a whole would not wish for or choose to live under. That would exclude Soviet Russia as it was a brutal military dictatorship,not a social democracy. But I would doubt that a population that has lived with the freedom of individual choice , and the chance of betterment through extra effort , imagination and courage that a sensibly managed capitalist democracy can provide would ever choose any other system we've heard about yet.

Cheers D J S

Nick J said...

Capitalism and communism are children of the Enlightenment which released science upon fossil fuels. The result was the industrial revolution that gave birth to the modern consumerist world. Neither capitalism nor communism could exist without this marriage of science technology and energy. Neither can claim credit for "progress". Neither are likely to survive the demise of cheap fossil fuels. Both might then stand amongst histories failed systems.

Richard McGrath said...

What then, Chris, do you propose as an alternative to the institutions of capitalism - free exchange and competition, a market economy, monetary exchange, private property rights, the rule of law?

Anonymous said...

Guerilla Surgeon,
How are

"The Soviet Union was the logical conclusion of the Marxist fantasy, applied with Russian paranoia and zeal."


"The current kleptocracy is the result of a power vacuum, and no history of or respect for representative democracy or judicial independence."


They seem accurate descriptions to me.

The crack about the left wanting everyone to be poor is a bit of a caricature, I'll admit!

Anonymous said...

More nonsense Trotter, of course capitalism is responsible for the enrichment of the proletariat it created, the only deviations from it in the last 150 years are the failed socialist experiments of the soviet union, china and indochina which were catastrophic as well as inhumane in they're totalitarian cruelty.

You are making the usual mistake (or perhaps its intentional) of defining capitalism as a wild west unregulated variety - which of course no longer exists, instead we have mixed capitalist economies - with property ownership and regulated markets, but softened with progressive taxation and government transfers and programs to ameliorate the worst excesses of the system and gaurantee some kind of equality of opportunity.

The alternaltives to capitalism - soviet communism or chavez democratic socialism have been discredited (sure paleo trots can never be convinced but they are an irrelevant minority) leaving the debate over minor details like the levels of taxation vs government spending - small change, good result, bravo Hayek, Smith and Friedman, you might try reading them one day Trotter - you could learn a thing or two from them.

Guerilla Surgeon said...

In these ways.
1. The Soviet Union was a dictatorship, nowhere near the logical conclusion of Marxism. Which to some might appear to be a fantasy but others not.
2. The current kleptocracy is a result of a mixture of factors, perhaps including yours, but it becomes caricature because of gross oversimplification. It makes it obvious you haven't done a great deal of reading on it, and doesn't reflect well on the believability of the rest of your stuff.
I could also say that the current kleptocracy is partly a result of advice given by neoliberal whackjobs to the Russian President. But that might be coming close to caricature.

Guerilla Surgeon said...

"instead we have mixed capitalist economies "

We wish! At least I wish ours was a little more mixed than it is.

Anonymous said...

If the Soviet Union and the existence of a socialist alternative had not been present in the post war period I doubt we would have had our welfare states in the West.

Bushbaptist said...

Russia has always needed a Strongman to control it. It is a multi-ethnic, multi-religious country. it is a huge country, on a modern airliner it takes 14.5 hours to fly from Vladivostok to Moscow and that is not all the way across it. It encompasses 10 time zones too and stretches across 2/3 of the nth Hemisphere.

Anon 9.17 Russia was never "Communist" and NZ was a Democratic Socialist country from WW II to 1984. During that time we had the largest middle class in history. Some-one from the Working Class could move up the ladder to become a Middle Class and many did. Since 1984 the Middle Class have been forced down to the Working Class and the working Class have been pushed out of the workforce. How many 50 year old people are working on the minimum wage in you local supermarket? These are the middle class that has been pushed out.

pat said...

@ anon 16.15

think you may have meant if the west didn't have millions of battle hardened (many disillusioned) returning servicemen post ww2 you doubt we would have developed our welfare states....

greywarbler said...

@pat and anon 16.15
I think that statement is pretty right. And also there was the incentive after WW2 to show that capitalism was better than communism, so there! With the Soviet Union melted away, there is no reason to wear the mask and carry the pretty flower in the gun. The ugly face of capitalism can match and better, the ugly face of communism now - no more Dr Jekyll and Mr Hyde.

And interesting read BushBaptist. How many 50 year olds shelf filling in the supermarkets? Lots it seems. Someone a little younger that I know works at the checkout, and I hear her leather soled shoes tapping smartly to work, about 20 minutes away, and sometimes I hear her walking back at around 11pm at night, 8 or 9 hours later. I call out hello without looking, knowing her footsteps and wish her a good day, though long and on her feet most of the time and unfailingly courteous, careful, warm in her manner. God I hope that the current protests about wages there don't rebound on her.

Unknown said...

If we have a resource capitalism will deplete it (make us wealthy then crash) quicker than socialism.

ngawaka19 said...

Great article. Relieving to know there is a consciousness about the capitalist ideology and the beast that it hides from us, and from itself. Hopefully the level of consciousness will rise, and Business Practice will implement the regulations needed to stay accountable to the environment, ecological safety and the well being of the human race on a physical and spiritual level.... Nice read thanks