Consequently, there is no built-in market incentive to eliminate environmental impacts that are borne by others, and a strong profit incentive to oppose attempts by governments or others to incorporate these costs in prices of goods. An example is the strenuous efforts by soft drink manufacturers against legislation to require a refundable deposit for bottles. In contrast, there is little or no profit incentive to promote certain options that are healthy and environmentally sound, such as walking to work or sharing goods.
As noted before, this is a stark presentation of the case against capitalism. Obviously not every generalisation applies universally. For example, though work is often unsatisfying, for some workers it is satisfying much or all of the time. The problem is that providing satisfying work is not a goal or design principle of capitalism. Similarly, some owners and managers make decisions for the public interest at the expense of profits. But although individuals can do good things, the capitalist system has no built-in method of encouraging this. The key problems with capitalism are predictable consequences of the way it is organised.
Strengths of capitalism
It is possible to get carried away with the problems of capitalism. Problems always need to be taken in context; especially important is comparison with alternatives. Capitalism may have problems but some other systems have worse ones.
As well as countering one-sided anticapitalist critiques, examination of capitalism’s strengths is also important in order to formulate better strategy. By understanding what capitalism does well, it may be possible to avoid unrealistic hopes and plans — such as the expectation that capitalism is on the verge of collapse.
Capitalism has repeatedly demonstrated the capacity to promote great increases in the productive capacities of societies, harnessing individual and social drives for improved living standards.[4] This is not guaranteed, as periodic recessions, depressions and collapses have demonstrated; also, increased economic productivity is possible in other systems such as state socialism. However, capitalism has an impressive record, with economic growth in numerous countries being far greater globally than in the days of feudalism. Comparisons between North and South Korea and between East and West Germany suggest that capitalism fosters economic growth far more effectively than state socialism. This can be attributed to the harnessing of self-interest, competition and the search for profits, compared to the bureaucratic constraints of state socialism. True, rampant capitalism growth is responsible for many problems, from inequality to environmental destruction, but the positive side is dramatically increased productivity.
Although capitalism is compatible with dictatorship, it also thrives in societies with representative government in which certain civil liberties are maintained, at least for most people most of the time. The “creative destruction” by which new products and new markets supersede old ones is facilitated by a moderately flexible society in which there is a degree of open dialogue and adaptation to new conditions. Furthermore, representative government provides social supports and opportunities for some citizen participation that can mitigate some of the worse excesses of capitalism, thus protecting the system against itself. For example, a free press and freedom of assembly together can operate to expose harmful products and damaging policies, thus protecting workers and consumers and ultimately ensuring a greater productive capacity.
Although many harmful and wasteful products are produced, capitalist markets are responsive enough to produce and distribute many largely beneficial products, such as vegetables, bricks, beds and recorded music. Indeed, the amazing range of consumer choice is one of the most enticing features of the capitalist system. In buying screws, breakfast cereals, travel packages or building materials, there are options for nearly every taste and requirement. Obviously there are limits to choice: taxpayers are de facto consumers of “defence services” but do not have a choice between military troops, conflict resolution services and peace brigades. But where choice is catered for by markets, even a small market segment can attract entrepreneurs, such as book publishers or cleaning services for tiny niche markets.
Capitalism judged by principles for a nonviolent alternative
Any challenge to capitalism needs to have some alternative in mind. In chapter 5, some nonviolent alternatives to capitalism are assessed against five principles, which themselves can be viewed as features of an expansive interpretation of nonviolence. Here is an evaluation of how capitalism rates.
Contrary to this principle, capitalism is founded on competition between firms and between workers, and discourages cooperation, except for the purposes of competition. It appeals to people’s worst impulses with the claim that pursuing self-interest serves the greater good. However, all available evidence from every field suggests that cooperation works better than competition.[5]
Capitalism does not operate according to this principle. Instead, the standard idea is that allocation of the economic product is through jobs: people get rewarded for doing the work to keep society going. This is a sort of meritocracy. However, although jobs do some of the allocation, there’s far more to the story. What actually determines a large proportion of the allocation of goods and services are:
• ownership of capital (providing profits to owners);
• credentials (providing high salaries to those with the background and opportunities to obtain degrees and enter occupational areas with protection against those without credentials[6] );
• executive salaries and perks (providing high return to managers with more power);
• state interventions (welfare, pensions);
• unpaid work (housework, child rearing).
Within the framework of the regulated market, solutions to economic inequality include reducing working hours, increasing wages, reducing credential barriers, taxing wealth and paying for housework. However, none of these challenges the foundations of capitalism.
Philosophers who look at “just desert” find little justification for unequal rewards.[7] Why should someone receive more simply because they have rich parents or high natural ability?
There is plenty of production in the world today to satisfy everyone’s needs but not, as the Gandhian saying goes, anyone’s greed. The problem is distribution.[8]
Under capitalism, this principle is not fulfilled. People are expected to adapt to fill available jobs, rather than work being tailored to the needs of people.[9] A job is typically regarded as an unpleasant activity that is necessary to obtain income for a good life.
Compared to a society that distributes goods to those who most need them, under capitalism there is a great deal of inappropriate production, wasted effort and pointless activity, including advertising, planned obsolescence, military production, provision of luxuries for the rich and unnecessary work and jobs that serve only to help justify receiving a share of society’s resources.[10] In contrast, there is a great deal of work that is needed but for which there is little or no pay, including child rearing, provision of goods and services for the poor, environmental improvements, and friendship and support for people who are lonely or have disabilities.
