Critique of Capitalism - Part I

From Zurich and Washington to Frankfurt, London, and Tokyo, everyone from bankers, economists, policy analysts, and government leaders-are trying to put capitalism back together again. But none of them has stopped to ask whether capitalism is worth saving in the first place.

Like the boy who cried wolf, socialists predicted the end of capitalism perhaps one too many times in the twentieth century to be taken seriously in the twenty-first. Yet it would be difficult to exaggerate either the profundity of the contemporary crisis, or the importance of developing a viable alternative to the existing order.

Last September, after the United States Treasury injected half a trillion dollars into the monetary system to unthaw the frozen U.S. banking system, Ben Bernanke, the chairman of the Federal Reserve, privately informed members of Congress "that the financial system had come perilously close to collapse." Only prompt action by the Treasury and Fed, he told them, had prevented "disaster" and "full-scale panic." The following month, while Iceland teetered on the brink of bankruptcy and Wall Street suffered its worst one-week stock market decline ever, Nicolas Sarkozy, the French president, candidly told reporters that the world economy had indeed been poised "on the edge of an abyss."

Since last summer, in fact, the governments of the leading industrialized countries have been engaged in an epic behind-the-scenes struggle to keep the global financial and banking system viable. So far, Germany has put up $679 billion to stabilize its banking system; Britain has spent the equivalent of one fifth of its national GDP. Meanwhile, by November of last year, the United States had either spent or assumed financial obligations totaling $7.8 trillion to stabilize the deteriorating financial sector-a staggering amount equal to half of this country's annual GDP. But even that has not been enough to stanch the blood of capitalism's hemorrhagic fever, which has raged on into the new year. In February-even as President Barack Obama (the national candidate of "hope" only months before) was bluntly warning of "catastrophe" if Congress failed to approve his $700 billion economic stimulus package-his new head of the Treasury, Timothy Geithner, announced a new plan committing the United States to an additional $2.1 trillion to stabilize the system. The Dow Jones plummeted an additional 4.6 percent on the news.

As of spring 2009, the leading capitalist states in Europe, North America, and Asia have thus either spent outright, or exposed themselves to financial risks totaling, well over $10 trillion-a figure so vast that one searches in vain for any relevant historical parallel. By comparison, the entire Marshall Plan to rebuild Europe after World War II cost a mere $9.3 billion (in constant 2005 dollars). According to the United Nations, it would cost $195 billion to eradicate most poverty-related deaths in the Third World, including deaths from malaria, from malnutrition, and from AIDS. So the amount of money committed by policymakers to save capitalism from itself is already fifty times greater than what it would take to save tens of millions of human beings from terrible daily suffering and premature death. If the wealthy nations instead invested that $10 trillion into the economies, health systems, and infrastructure of the Third World, rather than transferring it to the world's richest banks, private financial institutions, and investors, they could usher in a new epoch in the history of the species-a world community in which every human being would be guaranteed a livable life.

That the financial bailout is a colossal misdirection and waste of public resources, however, is not the most scandalous thing about it. What is truly unconscionable is that all this money is being spent to prop up capitalism itself-a mode of economic and social life that has corrupted and hollowed out our democracies, reduced great swaths of the planet's ecosystem to polluted rubble, and condemned hundreds of millions of human beings to wretchedness and exploitation.

Capitalism is rightly credited with having unleashed enormous forces of productivity and technology. But it has also reduced much of the world to ruin and squalor. After four centuries of triumph as the dominant mode of global development, capitalism has furnished for itself a world in which one out of two human beings lives on $2 per day or less, and more than one in three still lacks access to a toilet. Most children in the world never complete their education, and most will live out their lives without dependable medical care. As the world economic crisis deepens, already deplorable conditions in the Third World will only deteriorate further. Meanwhile, our planet is dying. Or rather, its flesh and blood creatures are.

In 1997, a group of European academics published a book called The Black Book of Communism, in which they documented the brutality and mass killings committed by totalitarian Communist regimes in the course of the twentieth century. Perhaps a group of academics will one day publish a Black Book of Capitalism. They should. For when a mode of life that subordinates all human and spiritual values to the pursuit of private wealth persists for centuries, there is a lengthy accounting to be made. Among the innumerable sins that have followed in capitalism's long train, we might mention, for example, the hidden indignities and daily humiliations of the working class and the poor; the strangulation of daily life by corporate bureaucracies such as the HMOs, the telecom companies, and the computer giants; the corruption of art and culture by money; the destruction of eroticism by pornography; the corruption of higher education by corporatization; the ceaseless pitching of harmful products to our children and infants; the obliteration of the natural landscape by strip malls, highways, and toxic dumps; the abuse of elderly men and women by low-paid workers in squalid for-profit institutions; the fact that millions of poor children are sold into sexual slavery, and millions of others are orphaned by AIDS; and the fact that tens of millions of women turn to prostitution to pay their bills. We might also highlight the dozens of wars and civil conflicts that are directly or indirectly rooted in the gross material disparities of the capitalist system-the bloody conflicts that simmer along from month to month, year to year, as though natural and immutable--in places like Darfur, Rwanda, Congo, Afghanistan, Vietnam, and Iraq, where millions of wretchedly poor people die either at the hands of other wretchedly poor people, or from the bombs dropped from the automated battle platforms of the last surviving superpower.

credit: John Sanbonmatsu