23 travanj 2021 ~ 2 Comments

Why Capitalism Cannot Stay

After my recent presentation on the first Croatian streaming TV, one viewer wrote about my judgment about the expected disappearance of capitalism from the globalized species Homo sapiens. “Wise, but a departure from reality, because capital will never abdicate, and money governs globalism, and how to dismantle it?”

In my opinion, one should not wait for the renunciation of power or the abdication of capital. Capitalism needs to be removed. In this essay, I will endeavour to explain why it is not only possible but also inevitable to remove capitalism as an approach to the ordering of human living communities and our entire species.

What is capitalism? Capitalism is the present and I hope the ultimate model of civilization. Civilization is a way of governing living communities, according to which (1) power is separated from the community, (2) common property is taken away from the community and privatized, and (3) power is tied to private property. Private property has for long consisted of real estate and their geographical location, as well as the forced labour of subjects who were formerly members of the community. In capitalism as the present model of civilization, power is tied to free world capital, which has accumulated in the West since the Renaissance.

Where and how did Western capital accumulate? The first capital that did not dissipate over time was accumulated in Genoa during the fifteenth and sixteenth centuries. In that first round of capital accumulation, Genoa enjoyed the external protection of the Habsburg lineage, which had estates spread across Europe and a vast world colonial empire. After the weakening of the Habsburgs, the second round of capital accumulation took place in the Netherlands, into which the accumulated Genoese capital also merged. Dutch capital enjoyed the internal protection of the United Dutch Provinces, which overthrew the Habsburgs in 1588. The Netherlands has been the undisputed mistress of the world for a century. [The weakening of the Netherlands began with the conclusion of the Peace of Westphalia, which was arranged by the Netherlands itself, because in the previous Thirty Years’ War (1618-1648) it was without a European market for its colonial goods. After 1648, for the sake of peace, absolutism was introduced, which was the opposite of the “open society” of the Netherlands and mercantilism, which was the opposite of liberal capitalism and which consisted in the closure of production processes within state borders and in the balance of trade between countries. At the time of mercantilism, the market was under the control of (absolutist) state authorities. In addition, the overseas colonial systems of European states were separated and closed monopolies.]

The third round of capital accumulation took place during the eighteenth and nineteenth centuries in England, into which Dutch capital eventually merged, as capital in England produced better. In the English case, the kingdom was a means of capital, which provided protection to the kingdom. (This was shown by the founding of the Bank of England in 1694.) In the first two rounds, capital was accumulated through trade and the plunder of other people’s wealth, including the plunder of people, who were traded as slaves. In the English round, capital was also accumulated by industrial production in the nineteenth century, but up to the middle of that century Britain had protected its expensive agricultural production by closing the food market.

After the “unification” of the United States in the bloody Civil War (1861-1865), capital began to accumulate strongly in the United States through the use of domestic natural resources, the development of technology and industrial production, but without foreign trade and without plundering other people’s wealth. The United States had isolated its economy: there were no imports of finished products, but it was abundantly receiving foreign capital, which flowed profusely from England. Thus, the combination of capital and the American state, on the one hand, enabled a strong accumulation of capital, and on the other hand, before the First World War, the United States became the strongest political, economic and military power in the world. A novelty in the fourth, American round of capital accumulation was the use of money as a commodity rather than as a medium of exchange. Apart from money, nature and people have become commodities on the market. Capital in the United States – as it was earlier in the Netherlands and England – had internal protection. In the US, capital was originally accumulated in the areas of finance, transportation and communications (banks, railways, telegraph, and telephone) and in the areas of entertainment (photography, film, Hollywood, Broadway).

Along with the rise of the United States, there was a strengthening of the economy, politics and military power in Germany and Japan, according to the American template: restriction of imports, development of technology, industrialization and the creation of cartels. On the eve of World War I, German industrial production was equal to the total industrial production of Britain and France. Atlantic capital could not come to terms with such a development in Europe, so it pushed the whole of Europe into war. World War I was the result of the use of states or politics for capital gains. Wall Street gave war loans to warring countries. (The answer to nineteenth-century British liberalism was twofold: Bismarck’s economic nationalism and Marxism, which later moved from Germany to Russia.)

The purpose of capital accumulation is not to increase the personal or family consumption of capitalists or people who gather capital. The purposes of excessive capital accumulation are to establish and strengthen political power. By the end of the nineteenth century, capital was sufficient to rule separately the peoples in their historical states. At the beginning of the twentieth century, so much capital had accumulated in the United States that American capitalists had sought to rule the world or the entire species of Homo sapiens.

In short, the centuries-old process of capital accumulation in the West shows the close connection between capital accumulation and the use of state. Until the outbreak of World War I, capital has controlled nation-states, and after that war, the United States sought to rule the world through the export of capital and American democracy, and through the League of Nations. (Capital pursued the ideological uniformation of the world.) This was successfully opposed by France and Britain as victors of the war and as colonial powers. In addition, the Great October Revolution was carried out in Russia. The economic crisis created by the war and the subsequent Great Depression triggered in the USA by financial speculations of free capital caused a series of nationalist revolutions in Europe. By June 1940, almost all of Europe was under the regimes of National Socialism, fascism, or corporatism. (The answers to earlier Dutch capitalism were absolutism and mercantilism.)

The then emergence of economic and political systems that opposed capitalism was the result of uneven economic development, which capitalism created by the arbitrary use of accumulated capital. (Capital accumulates better by warming developed markets than by expanding the sale of products in less developed markets.) Capitalism has hit individual people and nations with spatially uneven development. In Russia, capital was opposed by the working class, and in the rest of Europe – with the exception of Britain – capital was opposed by nations. Between the world wars, the world was torn by three ideologies: liberalism, communism, and National Socialism. Until then, ideologies did not play a crucial role, because the entire West was “Christian.” The ideology of the Third Reich and the immature, ideologized German geopolitics of the time led the Third Reich to attack the Soviet Union, with which the Reich had been an ally until that attack. If that attack had not taken place, the world today would look different politically.

World capital accumulated in the United States sought to rule the world after World War II, again through the export of capital and democracy, but also through the use of world political and financial institutions: the UN, the World Bank, the International Monetary Fund and the aborted International Trade Organization (ITO), which was established in 1995 as the World Trade Organization (WTO). The implementation of this idea was prevented by the Soviet Union, which “carried out” socialist revolutions in Eastern Europe and in China, Mongolia, North Korea and Vietnam. The American state was the strongest state in the world, but it was too weak to help capital establish world power. From the Great October Revolution until the end of the Cold War, capitalism had an alternative in socialism, in which capital belonged to the people, the state, or the working class.

After the Cold War, capital harnessed the United States to establish its world hegemony, but that hegemony lasted only about ten years. The new political reality arose from the renewal of national power in Russia (1999) and China’s entry into the world economic stage and its accession to the World Trade Organization (2001). American capital began to flow into China, not as financial but as industrial capital, which became tied to “labour and space.” (In four Western rounds of capital accumulation, financial capital or cash flowed from one country to another.) Along with China and Russia, other countries followed the path of economic nationalism: Iran, Turkey, India, Japan, Vietnam, Israel, South Korea, Saudi Arabia and other Asian countries and many countries in Africa and Latin America. A new alternative to liberal capitalism is being created, but capitalism does not tolerate alternative political systems.

I will emphasize that in today’s globalized world, the alternative to liberal capitalism is neither workers’ nor National Socialism, but a new alternative, which I call politism. Politism is an approach to the organization of the state, according to which politics or the performance of the collective work of the people or the living community takes precedence over narrow economic gains, over protection and over ideology. Capital already gradually hands over to the peoples their states, which it has so far controlled. What kind of countries will Afghanistan, Iraq, Syria, Yemen, Egypt, Libya and other countries become, after the world capital has unsuccessfully tried to “build” in them its own regimes? Which way will go the European Union, in which liberal capitalism has created ruin? What kind of political system will Croatia set up if it does not want a complete replacement of population in it? This is the case in many countries around the world. I will emphasize that capital, by promoting consumption and advocating the greatest possible economic growth, has created general debt slavery of states, peoples, corporations, financial institutions, families and individuals. States are in debt and are powerless to help their populace. However, in our species the awareness that the world cannot last long in the present way is rapidly spreading.

In a world where many states have already shown disobedience, capital will increasingly lose power over the species. Capital could preserve its power only if it established a unitary world state, in which a single political system would be established, a single military force that can only be legally used by free capital and the ideology of liberalism as the only system of belief. This cannot happen, because there are sovereign nations, which do not intend to give up their states, and because belief systems are not bought from catalogues, but are created by evolution in historical nations, many of which last for millennia. Fewer and fewer people are reluctant to take the “fast food” of world capital. Capitalism will be seriously endangered when states limit the freedom of capital and when capital begins to be tied to space and labour.

The first deadly means of capitalism were the mighty concentration of capital and the freedom of its circulation. Therefore, the species should scatter capital on countries and peoples and tie it to the Earth and life on it. Another means of capitalism is the free world market. State market surveillance is undesirable for capital, because the free sale of attractive and heavily promoted products and services drains capital from local markets and piles it in places from where production is credited, which is also exploited and indebted. Earnings from sales in local markets are finally flowing into the treasury of free world capital. With the existence of a global free market, it is difficult to accumulate capital in local markets. They may increase employment, but the employment of low-paid workers is not a means of capital accumulation. Did not Western countries in which capital had accumulated fully control their markets for capital accumulation, and did not many of them establish colonial monopolies? By taking control of their own markets, nations will seriously threaten capitalism. Trade agreements can be made by states as well, not just by private corporations.

The third deadly means of capitalism was the choice of technology. Capital decided in which industries the technology would develop. The purpose of investing in technology has always been the same: to create new products and services that will enable (excessive) economic growth and a particularly strong additional accumulation of free capital. In the West, capital has been invested in digital technology in recent decades, which has made it possible to create private or „social“ networks, which are used for entertainment and for the exchange of unnecessary information, often harmful to people. In contrast to the West, China has invested huge capital in creating green technology for the exploitation of renewable energy sources. (In China, 5G digital networks with built-in artificial intelligence are also used to combat the corona virus pandemic and to do daily family, corporate and public work. Homo sapiens are crying out for new technology to stop the decay of the Earth and life on it. Nations will tame free capital and remove capitalism and by taking control of the development and of the use of technology that is not created by capital, but by people with their knowledge and invention.

One of the devastating consequences of great accumulation and complete freedom of capital is the unequal distribution of income and wealth among nations and within nations. The freedom and arbitrariness of capital reveal the racism of capital. Countries with developed markets are one realm, and countries rich in natural treasures are another. Well-paid professionals, entertainers, or athletes through whom free capital accumulates in all nations are one thing, and the other are poorly paid workers who, with their meagre income, create little demand in the market. Divisions among nations and within nations have made the world an unprotected and dangerous place. Fairness is not a superfluous word. Fairness in education, business, investment and rewarding knowledge and work makes the world more peaceful and the species more protected. Capital will have to accept fairness in its relationship with the species, which is globalized and which of small human forces can create a strong and threatening collective life force.

Homo sapiens need a cleaner and tidier Earth. It needs more life in and around itself or in the biome. The species urgently needs to stop the deterioration of climate and to start its improvement. Meeting these needs of the species should replace the demands of capital, which goes only for economic growth and further self-multiplication. The species and its peoples need to tame capital and make it responsible. Capital should not be tied only to space and work, but also to the Earth, life on it and the climate. Tied capital is good and useful capital. Free capital is evil. Freedom of capital is slavery of our species. The species needs to shake off free capital, and capitalism needs to be removed, in order to improve health in it and to bring life back to it. The globalized species has a great life force. Enough awe of capital!

The corona virus pandemic has exacerbated the survival of Homo sapiens. (A strain of corona virus has recently emerged in India, which has undergone three simultaneous mutations. In the United States, in a retirement home, residents were recently infected, even though they were already vaccinated, apparently earlier this year. The infection was brought in by an unvaccinated home employee.) The species Coronavirinae could overpower the species Homo sapiens and remove it from the Earth. Therefore, our species needs to defend itself against the onslaught of viruses, but capitalism is not a political and economic system from which the species could oppose pandemics. Capitalism multiplied our species, drove it into huge multimillion cities (Tokyo, Mumbai, Mexico City), and squeezed people alongside animals that carry viruses but are resistant to them.

The species will have to invest huge sums of money in fighting pandemics, in the search for vaccines and drugs, in people’s life knowledge, in educating people to coexist with viruses, in science and new technology, and in producing new goods needed by the health system and health workers. The species will have to create a world health system. Now our species, nations, and states are debtors, and capitalists are creditors. Such a relationship is unacceptable for the species. Therefore, all free capital should be tied to the species, peoples, nation-states and health of people. The corona virus pandemic has shown that capitalism has betrayed the species, because capital does not want and cannot take responsibility for the Earth, life and our species. Capitalism has plundered the species, and the species now really needs money. The accumulated private money should either be taken by tax from the capitalists or should be devalued by the constant state issue of money for the needs of the Earth and life. (Such a measure was implemented in France in 1945 and 1946, when the government confiscated the properties and businesses of Nazi collaborators and repaid all domestic debts with excessively printed money.) The species is at war and will be at war with the virus for a long time, so it must have a war tax system.

In summary, nation states can and must (1) prevent the possibility of further accumulation of private capital, (2) deprive capital of freedom of circulation, (3) take freedom of the world market, (4) take over the development of technology and the establishment of new, clean energy and industry, ( 5) decisively reduce the differences in income and wealth of peoples and within peoples and (6) to invest enormous wealth in cleansing the Earth, rebuilding life on it, improving the climate and restoring the physical and mental health of people. Thus, as the mentioned listener would say, capitalism could be “dismantled”. The species has no other solution. Either capitalism or species!

The transition of our globalized species from capitalism as a model of civilizations to politism as a model of community is calculated on the self-protection of the species, and will be a process of the adaptation of the species to the circumstances it created under the compulsion of capital. The species is primarily faced with the task of improving the current life-threatening circumstances.

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2 Responses to “Why Capitalism Cannot Stay”

  1. ira kaufman 5 svibanj 2021 at 20:40 Permalink

    For 4 years I’ve been searching for the answers of why the world is broken. My Croatian colleague and I address this complex question in EmPower Us from Crisis to Strategic Harmony http://www.empowerus.world

    I strongly believe that we need to transform the global business model of SOLELY profit orientation and exploitation of scarce resources into a quadruple bottom line model which is circular driven and translates values into VALUE for all stakeholders.

    Globally Business schools need to be renovated or become irrelevant. They must reject the doctrine of Milton Friedman the social responsibility of business is profit..
    The next generation of entrepreneurs must be Values based, impact driven.. the business community must prioritize social responsibility or their self-interest will destroy the planet.

  2. Raoul Fischer 6 svibanj 2021 at 14:39 Permalink

    Stakeholder based economy is a pipe dream, loved by do-gooders and proven catastrophic as recently as the Astra Zeneca example. Oxford dons rejected Merck as a partner because it wouldn’t join in endeavor of producing vaccine in an non-for-profit environment. So, socially more woke Astra Zeneca joined the Oxford team, and accepted that he stakeholder will have priority and that any hope for profit will be postponed until after the pandemic is over. No profit — no money for investment (in production facilities) and inability to deliver more than a quarter of expected commitments to EU. Bismarck, the economic nationalist mentioned earlier in the article, said: Zwoelf Professoren, Vaterland verloren — the woke dons have no just lost the fatherland but also delayd cure for millions, and possibly caused thousands of unnecessary deaths. Stick to Miltoneism, produce profit and capital AND THEN use it for humanitarian purposes. Astra Zeneca and Merc, Sanofi and others are in business of making drugs and generating capital, not in fixing the world’s injustices.

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