Criticism Of Capitalism

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Arguments Against the Economic System of Capitalism

For the political movement that finds fault with the whole messy enterprise of capitalism, one might consult the entry on Anti-capitalism. It’s a rather large topic, as you’ll see.

The magnum opus of criticism, the very bedrock of dissent for many, is Karl Marx's monumental three-volume work, Das Kapital. It’s a dense, sprawling dissection of the capitalist beast, and frankly, a bit much for anyone with a short attention span.

The criticisms leveled against capitalism are as varied as the people who offer them. They range from mild disagreements about its messy outcomes to a complete rejection of its foundational principles. These critiques emerge from a spectrum of political and philosophical landscapes, including the rather uncompromising realms of anarchist thought, the collectivist ideals of socialism, the moral pronouncements of various religious doctrines, and even the exclusionary fervor of some nationalist perspectives. The pathways to dismantling this system are also debated: some advocate for a swift, often violent, revolution, while others prefer the slow, grinding gears of political reforms. Then there are those who see some utility in capitalism, but wish to shackle it with social controls, usually through the heavy hand of government regulation, as seen in the social market philosophy.

Among the most persistent accusations hurled at capitalism are that it is fundamentally exploitative, leading to the alienation of the individual from their labor and their very self (Marx's theory of alienation); that it is inherently unstable, prone to catastrophic collapses and crises; that it is unsustainable, burning through resources with reckless abandon; and that it breeds vast chasms of economic inequality. It’s accused of reducing human beings to mere commodities, of fostering a plutocracy rather than a true democracy, and of eroding fundamental human rights and national sovereignty. Furthermore, it’s seen as a prime motivator for imperialist expansion and the perpetual engine of war, all for the benefit of a select few at the expense of the many. And let’s not forget the environmentalists, the leftists, the degrowthers, and others who point out its voracious appetite for natural resources, its contribution to climate change, the devastating loss of biodiversity, the depletion of topsoil, the rampant eutrophication of waterways, and the sheer mountains of pollution and waste it generates. It’s quite the rap sheet.

History

This section is part of a broader exploration of Capitalism, a topic that seems to have more facets than a poorly cut diamond.

Concepts

Ah, the building blocks. We have Austerity, the ever-present specter of scarcity. Business itself, a rather nebulous entity. The inevitable cycle, a recurring nightmare. Capital, the elusive prize. Capital accumulation, the relentless pursuit. Capital markets, where dreams are traded. The ubiquitous Company and its more formidable cousin, the Corporation. The supposed virtue of Competition, often a brutal affair, governed by equally brutal law. The very Definitions are a battlefield. Then there's the heavy-handedness of Economic interventionism, the seductive whisper of Economic liberalism, and the often-painful process of Economic liberalization. Economic surplus, a concept ripe for contention. The driving force of Entrepreneurship, often a euphemism for risk-taking with other people’s money. The phantom realm of Fictitious capital, the abstract currency of speculation. Financial market, a casino for the privileged. The mythical Invisible hand, contrasted with its more tangible counterpart, the Visible hand_(economics). The fine art of Marginalism. The bedrock of Private property, a concept that has launched a thousand wars. The inevitable march of Privatization. The ultimate goal, Profit, often pursued with a singular, almost pathological, focus. The parasitic practice of Rent seeking. The delicate dance of Supply and demand. The core of Marxist critique, Surplus value. And finally, Value, a concept as slippery as an eel in oil. Oh, and let's not forget Wage labour, the very engine of much of this critique.

Systems

The variations are almost as numerous as the flaws. We have the rather blunt instrument of Anglo-Saxon capitalism, the iron fist of Authoritarian capitalism, the pervasive influence of Corporate, the guiding hand of Dirigist, the idealized (and often mythical) Free-market, the ethically questionable Humanistic, the hands-off approach of Laissez-faire, the diluted version of Liberal, the fiercely individualistic Libertarian, the ubiquitous Market, the historically significant Mercantilist, the messy compromise of Mixed, the potentially sinister State monopoly, the nationalistic fervor of National, the austerity-driven Neoliberal, the socially conscious (or so they claim) Nordic, the purely individualistic Anarcho-capitalism (a contradiction in terms, if you ask me), the raw, unadulterated Raw, the controlled Regulated market, the ever-present Regulatory, the structured Rhine, the ostensibly benevolent Social market economy, the politically manipulated Political, the omnipresent State, the state-sanctioned State-sponsored, and the seemingly benevolent façade of Welfare. It’s a dizzying array, isn’t it?

Theories

The intellectual scaffolding: the pragmatic American School (economics), the ideologically driven Austrian school of economics, the abstract theories of Chartalism and MMT, the influential but often criticized Chicago school of economics, the foundational Classical economics, the focus on institutions in New institutional economics, the demand-driven Keynesian economics and its offshoots Neo-Keynesian economics and New Keynesian economics, the more radical Post-Keynesian economics, the niche Market monetarism, the foundational Critique of political economy and the equally critical Critique of work. Then we have the comprehensive framework of Marxian economics, the foundational Monetarism, the dominant Neoclassical economics, the institutional focus of New institutional economics again, and the supply-focused Supply-side economics. It's a veritable smorgasbord of economic thought, much of it aimed at dissecting the same flawed system.

Ideologies

The philosophical underpinnings: the chaotic ideal of Anarcho-capitalism, the oppressive structure of Authoritarian capitalism, the foundational principles of Classical liberalism, the celebrated but often elusive Democratic, the state-controlled Dirigisme, the environmentally questionable Eco-capitalism, the pragmatic Gladstonian liberalism, the ethically ambiguous Humanistic capitalism, the inclusive-sounding but often exclusionary Inclusive capitalism, the foundational Liberal capitalism, the broader philosophy of Liberalism, the fiercely individualistic Libertarian capitalism, the vague concept of Neo-Capitalism, the dominant force of Neoliberalism, the individualistic philosophy of Objectivism, the regulated market approach of Ordoliberalism, the emphasis on private ownership of Privatism, the freedom-focused Right-libertarianism, and the pragmatic blend of Third Way. So many labels, all trying to package the same fundamental drive for profit.

Origins

The historical roots: the intellectual ferment of the Age of Enlightenment, the often-contentious relationship of Capitalism and Islam, the transformative era of the Commercial Revolution, the predecessor system of Feudalism, the disruptive force of the Industrial Revolution, the early, state-controlled precursor of Mercantilism, the foundational concept of Primitive accumulation, the agricultural focus of Physiocracy, and the basic concept of Simple commodity production. A tangled lineage, indeed.

Development

The evolution of the beast: the sophisticated but often brutal Advanced capitalism, the consumer-driven Consumer capitalism, the community-focused (or perhaps, community-exploiting) Community capitalism, the all-encompassing Corporate capitalism, the cronyism-riddled Crony capitalism, the speculative realm of Finance capitalism, the border-spanning Global capitalism, the oppressive Authoritarian capitalism (also known as illiberal), the modern manifestation of Late capitalism, the Marxist analysis of the Capitalist mode of production (Marxist theory), the historical era of Merchant capitalism, the reformist approach of Progressive capitalism, the rentier-dominated Rentier capitalism, and the all-powerful State monopoly capitalism. It’s a chameleon, this capitalism, constantly shifting its form.

Intellectuals

The architects and critics: Adam Smith, the progenitor of the "invisible hand" myth. Jeremy Bentham, with his utilitarian calculus. Thomas Robert Malthus, who saw population as the ultimate constraint. Jean-Baptiste Say, who believed in the inherent balance of markets. David Ricardo, who laid out complex theories of rent and value. James Mill, a foundational liberal thinker. Frédéric Bastiat, a staunch defender of free markets. Eugen von Böhm-Bawerk, a key figure in the Austrian School. Alfred Marshall, who refined neoclassical economics. Vilfredo Pareto, with his observations on income distribution. Max Weber, who linked capitalism to the Protestant ethic. Ludwig von Mises, a titan of Austrian economics. Joseph Schumpeter, who celebrated "creative destruction." Friedrich Hayek, a fierce advocate for free markets and limited government. Walter Block, a contemporary libertarian economist. Ronald Coase, known for his work on transaction costs. George Stigler, a Nobel laureate for his work on industrial organization and the history of economic ideas. Milton Friedman, a towering figure of monetarism and free-market advocacy. James M. Buchanan, a Nobel laureate for his work on public choice theory. Murray Rothbard, a prominent anarcho-capitalist theorist. Thomas Sowell, a prolific conservative economist. Gary Becker, a Nobel laureate for his work on applying economic analysis to human behavior. Arthur Laffer, famous for the Laffer curve. Robert Lucas Jr, a Nobel laureate for his work on rational expectations. And Ayn Rand, the novelist and philosopher whose Objectivist philosophy championed laissez-faire capitalism. A formidable, if often misguided, pantheon.

Early Critics

The early dissenters, like Friedrich Engels, were quick to point out the grim realities birthed by the fervor of industrialization across Europe. Picture this: 14-hour work days, the exploitation of child labor, and the grim sprawl of shanty towns. Some modern economists, bless their detached souls, argue that the average person’s living standard saw little to no improvement, or at best, a glacial crawl, before 1840. A rather bleak assessment, wouldn't you agree?

Criticism by Different Schools of Thought

Anarchism

The anarchists, bless their iconoclastic hearts, have a rather robust critique. Pierre-Joseph Proudhon, for instance, saw government privilege as the protective shield for capitalist, banking, and land interests. He believed that property accumulation, and any coercion that facilitated it, actively stifled competition and kept wealth concentrated in the hands of a select few. Then there's the individualist anarchist [Miguel Giménez Igualada], who argued with a certain stark clarity that "capitalism is an effect of government; the disappearance of government means capitalism falls from its pedestal vertiginously... What we call capitalism is nothing else but a product of the State, within which the only thing that is being pushed forward is profit, good or badly acquired. And so to fight against capitalism is a pointless task, since be it State capitalism or Enterprise capitalism, as long as Government exists, exploiting capital will exist. The fight, but of consciousness, is against the State." Quite the pronouncement.

Within the anarchist fold, the concept of wage slavery emerged, painting a picture of a quasi-voluntary servitude, where one's very livelihood is chained to wages, especially when that dependence is absolute and immediate. It’s a negatively connoted term, designed to draw a stark parallel between slavery and wage labor, highlighting the similarities between owning and renting a person. This critique targets economic exploitation and social stratification, focusing on the unequal bargaining power between labor and capital—particularly in places like sweatshops where wages are pitifully low—and the lack of workers' self-management, limiting their agency in work and leisure.

Libertarian socialists, in their pursuit of freedom, advocate for a system where individuals hold sway over economic decisions, mirroring their political autonomy. They champion direct democracy, voluntary federation, and popular self-governance across all facets of life. The Industrial Revolution spurred thinkers like Proudhon and Marx to draw parallels between wage labor and slavery, particularly in their critique of property not actively used. The Luddites underscored the dehumanization wrought by machinery, while Emma Goldman famously decried wage slavery: "The only difference is that you are hired slaves instead of block slaves." She argued that capitalism was fundamentally incompatible with human liberty, stating, "The only demand that property recognizes... is its own gluttonous appetite for greater wealth, because wealth means power; the power to subdue, to crush, to exploit, the power to enslave, to outrage, to degrade." She also contended that capitalism turned workers into mere cogs in a machine, stripped of will and agency.

Noam Chomsky suggests a chilling moral equivalence between chattel slavery and the act of selling oneself into wage labor, viewing it as an assault on personal integrity and individual freedom. He posits that workers should indeed own and control their workplaces. Many libertarian socialists advocate for large-scale, voluntary associations to manage industrial production, with workers retaining ownership of their labor's fruits. They distinguish between "private property," which grants exclusive control irrespective of use, and "personal possession," which is tied to actual use.

Beyond the "big four" monopolies identified by Benjamin Tucker (land, money, tariffs, and patents), the neo-mutualist economist [Kevin Carson] argues that the state has further enriched the wealthy through subsidies for centralized organizations, particularly in transportation and communication. Carson's work, particularly in Studies in Mutualist Political Economy, attempts to integrate marginalist critiques with the labor theory of value and has been highly critical of intellectual property. He contends that capitalism, born from a foundational act of "robbery" akin to feudal land conquest, persists only through continuous state intervention and privilege. Carson also coined the term "vulgar libertarianism" to describe the defense of corporate capitalism and economic inequality using free-market rhetoric, a phrase he derived from Marx's critique of "vulgar political economy" which attempts to gloss over inherent contradictions.

Conservatism and Traditionalism

Even within conservatism, a critique of capitalism has surfaced. Peter Kolozi, in Conservatives Against Capitalism, draws on Norberto Bobbio's distinction between left and right, associating capitalism with a preference for equality over hierarchy. Kolozi argues that critics from the right have consistently viewed laissez-faire capitalism as a corrosive force that undermines established social hierarchies and the virtues associated with them.

In September 2018, Murtaza Hussain, writing for The Intercept, observed that "conservatives against capitalism" share with the left a concern for community, arguing that "free-market capitalism" has eroded "networks of community, family, and professional associations," leaving individuals atomized and isolated.

Bridget Ryder, in The European Conservative (June 2023), noted the growing appeal of the degrowth movement among conservatives who are skeptical of endless economic growth, finding inspiration in pre-industrial European traditions.

Fascism

Fascists, in their peculiar blend of nationalism and authoritarianism, positioned themselves against both international socialism and free-market capitalism, claiming to offer a "Third Position" (Third Position) that was neither laissez-faire nor communism. Their economic model favored corporatism and class collaboration, accepting social hierarchy as natural (unlike socialists) but maintaining that the state should actively mediate class relations (unlike economic liberals).

Liberalism

Even among proponents of liberalism, particularly during the Age of Enlightenment, critiques of wage slavery emerged. However, classical liberalism itself became deeply entwilled with capitalism, championing the free market and laissez-faire principles.

Marxism

This is where things get truly intricate. Karl Marx viewed capitalism as a specific mode of production, defined by the ownership and control of productive property and the resulting social relations. He traced the origins of the "capitalistic era" to the 16th-century merchants and small workshops, acknowledging that wage labor had existed for centuries prior. For Marx, capitalism represented the most advanced stage of social organization thus far, but he foresaw its eventual overthrow by a global socialist or communist revolution, marking the culmination of historical class rule.

Following Adam Smith, Marx differentiated between the use value of commodities and their exchange value. Capital, in his view, is generated by acquiring commodities to produce new ones with a greater exchange value. Crucially, Marx identified labor power itself as a commodity under capitalism, with its exchange value (the wage) falling short of the value it produces. This disparity, the surplus value, is what capitalists extract and accumulate. In Das Kapital, Marx detailed how capitalists extract this surplus, a method distinct from the direct extraction of surplus labor in earlier societies. He argued that capitalism necessitates a population stripped of independent means of sustenance, forcing them to sell their labor for a wage. Marx also believed the working class, due to its numbers and its relationship to the means of production, would be the driving force of this revolutionary transformation.

Vladimir Lenin, in his seminal work Imperialism, the Highest Stage of Capitalism (1916), expanded on Marxist theory, arguing that capitalism inevitably evolved into monopoly capitalism and the export of capital to secure new markets and resources. Later Marxian economists debated whether capitalism was defined solely by the dominance of capitalist class processes or by the extraction of surplus, even if generated by non-capitalist activities. David Harvey, in Limits to Capital (1982), explored capitalism's spatial restlessness and its tendency towards uneven development, arguing that capitalism requires "fixes" to overcome its inherent crises. Sociologist Ulrich Beck envisioned a "risk society" where risk itself becomes a commodity, entwining disasters with the capitalist economy.

Religion

Many organized religions have voiced concerns about capitalism. Traditional Judaism, Christianity, and Islam historically prohibited lending money at interest, though this has been circumvented by various financial mechanisms. Some Christians have criticized capitalism's inherent materialism and its failure to prioritize the well-being of all. Jesus' parables, often centered on economic themes, carry implications for wealth and power distribution. Catholic tradition, in particular, has often criticized capitalism for its impact on the poor, advocating for distributism as an alternative. Pope Francis, in his apostolic exhortation Evangelii gaudium, branded unfettered capitalism a "new tyranny," calling for action against poverty and inequality. He critiqued the persistent defense of trickle-down economics as a "crude and naive trust" in the powerful. The Catholic Church's social teaching, as outlined in papal encyclicals like Rerum Novarum and Quadragesimo Anno, opposes unrestricted capitalism due to its perceived individualism and disregard for social justice. Pope Francis further denounced capitalism's role in driving climate change in his encyclical Laudato si'. Islam's prohibition of riba (interest) directly clashes with the core mechanisms of capitalist finance.

Socialism

Socialists argue that the relentless pursuit of capital accumulation generates wasteful externalities that necessitate costly regulation. They also point to the creation of industries and practices, like aggressive advertising, solely designed to manufacture demand rather than satisfy existing needs, thereby creating demand rather than meeting it. This is seen as an inherently irrational aspect of capitalism.

The socialist critique often centers on the idea that making money, or accumulating capital, is divorced from the actual satisfaction of demand (use-values). The fundamental driver in capitalism is capital accumulation for reinvestment, which can lead to the proliferation of non-productive industries, such as the financial industry, that contribute to economic instability.

Socialists view private property relations as a constraint on the productive forces of the economy. They argue that private ownership becomes an anachronism when production is socialized but appropriation remains private, rendering the capitalist role redundant. This, they believe, should be replaced by a free association of individuals based on common ownership of these socialized assets. Private ownership, they contend, hinders planning, leading to uncoordinated decisions, business cycles, unemployment, and vast resource waste during crises of overproduction.

The inherent conflict between labor and capital, socialists argue, prevents optimal resource utilization and creates adversarial interest groups that distort economic efficiency. Early socialists, like the utopian socialists and Ricardian socialists, criticized capitalism for concentrating power and wealth in the hands of a few who failed to utilize available technology and resources for the public good. Albert Einstein, in his 1949 article "Why Socialism?" for Monthly Review, advocated for a socialist planned economy, arguing that a planned system geared towards community needs would ensure equitable distribution of work and resources, fostering a sense of social responsibility over the glorification of power.

Syndicalism

Syndicalists, rooted in the labor movement, critique capitalism through the lens of worker control and industrial organization. Their ideology, often intertwined with anarchism, emphasizes workers' self-management and the potential for general strikes to disrupt and ultimately transform capitalist production. Their critiques often highlight the inherent conflict between labor and capital, advocating for a system where the means of production are collectively owned and managed by the workers themselves.

Topics of Criticism

Democracy and Freedom

Economist Branko Horvat noted that capitalism’s tendency toward concentration of capital, employment, and power inherently leads to a severe curtailment of "economic freedom." Critics contend that capitalism, far from being democratic, is a plutocracy where the means of production are privately owned by a minority, leaving the vast majority without meaningful control over the economy. This concentration of wealth and power, they argue, fuels vast wealth and income inequalities. Policies that favor capitalists over workers, such as tax breaks for the wealthy and increased retirement ages against public will, are cited as evidence of this plutocratic bias. Terms like "Corporate capitalism" and "inverted totalitarianism" are used to describe systems dominated by large, hierarchical corporations that prioritize profit above all else, often at the expense of social welfare. These corporations, critics argue, wield disproportionate influence over government policy, undermining democratic principles of equal power relations. Activists on the political left aim to reduce the income gap and promote economic equity.

John Maynard Keynes, with his characteristic dry wit, observed, "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

The rise of massive multinational corporations is a significant concern for many scholars and activists, who see them as eroding fundamental human rights and [civil rights], including equitable distribution of wealth and power. Corporations, they argue, create artificial needs through pervasive advertising and exert undue influence on nation-states through lobbying and other forms of influence peddling. This influence, coupled with phenomena like "too big to fail" and corporate bailouts, creates a system of "socialism/communism for the very rich" and brutal Darwinian capitalism for everyone else. Critics argue that large corporations answer only to shareholders, neglecting human rights, social justice, and environmental concerns vital to the majority. Philosopher Jodi Dean contends that recent economic crises have shattered the illusion of capitalism's viability, as government bailouts and market rigging demonstrate a failure to deliver economic justice.

Quinn Slobodian points out that capitalism undermines democracy by creating "special economic zones"—areas with different laws and often lacking democratic oversight, such as tax havens or low-wage production sites.

David Schweickart argues that while capitalist societies celebrate political democracy, they deny citizens democratic rights within the workplace, where they spend most of their waking hours. Thomas Jefferson, one of the Founding Fathers of the United States, warned against the "aristocracy of our moneyed corporations" that dared to challenge the government. Franklin D. Roosevelt cautioned that unchecked private power could lead to fascism, defining it as "ownership of government by an individual, or by a group, or by any other controlling private power." He cited figures showing a vast concentration of corporate assets in the hands of a tiny fraction of corporations. President Dwight D. Eisenhower warned of the "conjunction of an immense military establishment and a large arms industry" and the need for balance between private and public economies. Christopher Hitchens, in a debate, stated that capitalism’s claims to sponsor freedom are merely "propaganda," as it has coexisted with and sponsored systems like feudalism, monarchy, fascism, and slavery.

Exploitation of Workers

The critique of capitalism as inherently exploitative is central, particularly through the lens of Karl Marx's labor theory of value. Classical economists like David Ricardo and Adam Smith also recognized that value was tied to labor. Marx, in Das Kapital, saw commodities as products of labor, exchanging based on the socially necessary labor time required for their production. He argued that laborers, separated from the means of production, are compelled to sell their labor power for less than its value, creating surplus value for the capitalist. This exploitation, Marxists argue, is not voluntary, as workers face destitution if they refuse. The existence of a reserve army of labor naturally drives down wages.

The act of striking is seen as a collective effort to withhold labor, but some critics argue that even trade unions merely reform an exploitative system. Lysander Spooner observed that "almost all fortunes are made out of the capital and labour of other men than those who realize them." Historians like Greg Grandin and scholars such as Edward E. Baptist, Sven Beckert, and Matthew Desmond argue that capitalism’s origins are deeply intertwined with slavery and violent development. Slavoj Žižek points to modern forms of contemporary slavery in global capitalism. Developmental psychologist Howard Gardner proposed wealth limits as a societal improvement. Richard D. Wolff argues that capitalism prioritizes profit over community needs and excludes workers from decision-making. Clara E. Mattei highlights how austerity policies, imposed to discipline labor, reinforce wage hierarchies, exploit workers, and boost owner profits, leading to global inequality.

Imperialism, Political Oppression, and Genocide

Vladimir Lenin, in Imperialism, the Highest Stage of Capitalism, argued that capitalism necessitated imperialism to survive, leading to monopoly capitalism and the export of capital. Economic anthropologist Jason Hickel asserts that capitalism’s need for continuous growth and expansion, fueled by cheap labor and accumulated wealth, inherently leads to violence, dispossession, and the destruction of self-sufficient economies. Sociologist David Nibert contends that capitalism’s growth imperative drives expansionist policies, citing the subjugation of indigenous populations for ranching as an example. Socialists often characterize capitalist governments as oligarchic due to inherent inequality. The military–industrial complex, as highlighted by Eisenhower, is seen as a significant driver of American militarism and interventionism, particularly in the Global South, to entrench neoliberal capitalism and suppress resistance, citing examples like Brazil, Chile, and Indonesia.

Inefficiency, Irrationality, and Unpredictability

Critics point to capitalism's inefficiency, noting a shift from pre-industrial thrift to a disposable consumer culture. The rise of a sanitation industry, which deems previously reusable materials as "trash," is seen as a hallmark of this wasteful system. Planned obsolescence, where products are designed to fail prematurely, is criticized for generating excessive waste and artificially stimulating consumption. Naomi Klein has critiqued brand-based marketing for prioritizing image over product quality. Marxian economists argue that the perpetual drive for capital accumulation leads to irrational outcomes and resource misallocation, with industries and jobs created for profit rather than genuine need.

Market Failure

Economists use the term market failure to describe situations where market allocations are inefficient. Keynesian economist Paul Krugman notes that individual self-interest can lead to societal harm. John Maynard Keynes favored economic interventionism over unfettered markets. Critics cite the lack of perfect information and perfect competition, as well as the prevalence of monopolies, monopsonies, insider trading, and price gouging, as justifications for government intervention.

Inequality

Critics argue that capitalism inherently leads to unfair distributions of wealth and power, fostering market monopolies or oligopolies, imperialism, and exploitation. They contend that laissez-faire combined with private property naturally leads to oligopolistic structures. Socialists view capitalism as irrational due to its unplanned nature, advocating for public policy control. Vladimir Lenin linked state military power to the defense of capitalist interests abroad. Richard D. Wolff describes capitalism as unstable, unequal, and undemocratic. Che Guevara, in a letter to Marcha, characterized capitalism as a "contest among wolves" where success comes at the cost of others' failure, obscuring the systemic poverty required for individual fortunes. Wealth inequality in the United States has demonstrably increased. Ravi Batra focuses on inequality as a driver of systemic failure, popularizing the "richest 1%" metric. Kristen Ghodsee and Mitchell A. Orenstein suggest that unfettered capitalism leads to wealth and power concentration in the hands of a few. Dylan Sullivan and Jason Hickel argue that poverty persists in a productive capitalist system because it is undemocratic and maintains extreme inequality, necessitating cheap labor and hindering worker control. Jonathan Nitzan and Shimshon Bichler state that "value is produced only by workers, capitalists can extract, appropriate and accumulate the surplus part of this value only through exploitation. And exploitation, by definition, negates equality." In the US, the top 1% hold significant shares of earnings and wealth. Critics like Batra argue that capitalist systems favor those with existing resources, propagating inequality through inheritance and policy. Studies show a significant portion of the wealthy were already affluent at birth, with wealth, race, and schooling playing larger roles than IQ in inherited status. Batra advocates for repealing policies enacted since the Reagan presidency that exacerbate inequality.

Market Instability

Marxists identify market instability as an inherent feature of capitalism, pointing to the contradiction between market anarchy and socialized production. Marx and Engels described a paradox of overabundance and poverty in The Communist Manifesto. The 2008 financial crisis is attributed by some scholars to the neoliberal capitalist model. Alan Greenspan admitted his error in presuming that self-interest would protect financial institutions, noting the collapse of the "intellectual edifice" of risk management.

Property

Pierre-Joseph Proudhon and Friedrich Engels argued that "free markets" are not truly free but rigged in favor of property owners. They saw capitalist regulations, particularly concerning private property and natural resources, as unjust enclosures that force the property-less to sell their labor cheaply. Proudhon famously declared, "Property is theft", arguing it leads to despotism. Many left-wing anarchists advocate for personal use-based claims over capitalist private property, defining property as "the domination of an individual, or a coalition of individuals, over things; it is not the claim of any person or persons to the use of things." Mutualists and some anarchists support markets but critique specific capitalist practices that involve coercion, advocating for markets where workers receive the full value of their labor. Critics view intellectual property laws, such as patents and copyrights, as coercive barriers to entry and stifling to idea sharing, leading to non-productive rent seeking.

Environmental Sustainability

Environmentalists and scholars argue that capitalism's imperative for continuous economic growth inevitably leads to the depletion of finite natural resources and mass extinctions. Neoliberalism, they contend, has exacerbated inequality and environmental degradation. Critics argue that capitalist environmental economics neglects resource preservation, creating ecological problems through growth, technology, and consumption. Professor Radhika Desai posits that ecological crises arise from capitalist firms plundering nature and forcing workers to overexploit remaining resources. The concept of commodity chains, or production/consumption networks, is criticized for generating pollution and waste. Critics acknowledge flaws in ecological footprint calculations but argue that capitalism's "grow or die" imperative, coupled with market and state resistance to reform, hinders timely environmental action. Immanuel Wallerstein calls the externalization of costs capitalism's "dirty secret." A UN report suggests capitalism is "moribund," focusing on short-term profits over long-term sustainability. Scientists advocating for a shift away from growth-centric paradigms propose degrowth and eco-socialism. Some link capitalism's rise to European imperialism and colonialism, marking the advent of the Anthropocene. Experts in 2024 called for a paradigm shift away from "imperialism, extractive capitalism, and a surging population" towards sustainability and communal well-being.

Profit Motive

The profit motive is criticized for encouraging selfishness and greed over the public good. Critics argue that companies prioritize profits over morals and safety, cutting wages and jobs at the expense of workers. The inherent conflict between capitalists seeking to minimize labor costs and workers seeking fair compensation is seen as a fundamental contradiction. Pure, unmoderated capitalism is argued to reward sociopathic behavior, leading to disinformation, extreme inequality, and manipulation of legal systems. While moderated capitalism is proposed, some counter that unbridled capitalism may prevail due to its generation of greater economic power.

Comparison to Slavery

The phrase "wage slavery" is frequently used to critique wage labor, drawing parallels to chattel slavery. Proponents of slavery historically invoked wage slavery to argue its superiority. Thinkers like Pierre-Joseph Proudhon and Karl Marx elaborated on this comparison, while Luddites highlighted the dehumanizing effects of machinery. Southern defenders of slavery used the term to contrast their "slaves" with Northern "wage slaves." Labor union activists later adopted the metaphor extensively. Noam Chomsky traces the psychological critique of wage slavery back to the Enlightenment, citing Wilhelm von Humboldt's observations on the dehumanizing effects of external control in labor. Anthropologist David Graeber notes that early wage labor contracts involved renting chattel slaves, and C. L. R. James argued that factory organization techniques were developed on slave plantations. Critics suggest that elites maintain wage slavery and division through media, education, unjust laws, propaganda, and the perpetuation of historical exploitation. Adam Smith himself observed that employers often conspire to keep wages low, creating a "tacit, but constant and uniform combination." Marxists and anarchists like Mikhail Bakunin and Peter Kropotkin viewed wage slavery as a class condition rooted in private property and the state. Marx considered labor as a commodity a fundamental attack on capitalism, as the worker's labor is the "absolutely necessary condition for capitalist production."

Supply and Demand

The standard theory of supply and demand faces critiques regarding its underlying assumptions. The Sonnenschein–Mantel–Debreu theorem suggests that standard models cannot be rigorously derived from general equilibrium theory. Critics argue that the model assumes perfect competition, yet lacks a clear explanation for how prices are adjusted in such markets. Economists like Goodwin, Nelson, Ackerman, and Weisskopf caution against over-reliance on the precision of supply and demand graphs, emphasizing their role as conceptual tools rather than accurate descriptions of real-world markets.

Surveillance

Shoshana Zuboff describes surveillance capitalism as a new form that monetizes data acquired through surveillance, originating with companies like Google and driven by the principles of financial capitalism and neoliberalism. This system relies on computer mediation to create a pervasive power structure she terms "Big Other." New information technologies create constant tension between privacy and surveillance, with power harnessed through a combination of control and freedom, often involving the privatization of data and public spaces.

Racism

Immanuel Wallerstein identified institutional racism as a cornerstone of capitalism, justifying workforce hierarchy and unequal rewards. Critics argue racism benefits capitalists by dividing the working class, hindering their unity and bargaining power. Racism was used to justify exploitation, as seen in the era of slavery in the United States, and to scapegoat groups like Jewish people to divert attention from capitalism's flaws, citing Henry Ford and Vladimir Lenin's observations on antisemitism as a distraction. While some argue capitalism adapts or transforms pre-existing racism, others contend racism is not inherent to the system. Proponents of free markets argue they can remedy racism, as discriminatory employers would be undercut by more rational competitors. However, studies suggest a correlation between support for free markets and discriminatory tendencies. Left-wing commentators argue capitalism promotes racism through culture wars over issues like immigration and ethnic minority representation, while neglecting economic inequalities.

Underdevelopment

Marxist and Neo-Marxist theorists link underdevelopment to capitalism, emphasizing the center-periphery relationship and "unequal exchange." Dependency theory posits that peripheral economies are subordinated to the capitalist world economy, initiated by European colonialism. Walter Rodney, in How Europe Underdeveloped Africa, argued that European imperialism led directly to Africa's modern underdevelopment. The concept of uneven development, derived from Leon Trotsky's theories, explains historical capitalist dynamics.

Counter-Criticism

Austrian School

Austrian School economists, like Friedrich Hayek, argue that capitalism is a self-organizing system where prices act as signals, guiding entrepreneurs to satisfy consumer wants through profit incentives. This coordination, they claim, arises from millions of individuals pursuing their own interests.

Ayn Rand

Novelist Ayn Rand passionately defended laissez-faire capitalism on moral grounds, particularly in Atlas Shrugged and Capitalism: The Unknown Ideal. She defined capitalism as a system recognizing individual rights, including property rights, where all property is privately owned. For Rand, the government's role is limited to protecting citizens from criminals and invaders and settling disputes through objective laws. Her ideas heavily influenced conservative and libertarian supporters of capitalism.

External Links

A few links that delve deeper into the critiques, offering alternative perspectives on entrepreneurship, the exploitation of miners, critiques of economic thought, Marx's arguments on value and profit, and discussions on the crisis of capitalism.

Articles Related to Criticism of Capitalism

A rather extensive network of related articles, covering everything from Anarchism and Communism to Syndicalism and Liberalism. It’s a veritable ecosystem of dissent.

This is, of course, just a glimpse. The criticisms are vast, intricate, and, frankly, often quite justified. Now, if you’ll excuse me, I have more pressing matters to attend to. Unless, of course, you have a truly interesting question.