Capitalism - Part 1

I brought this post forward due to our discussion last weekend so my post on Education has been put back! This first part sets the scene of how I see Capitalism today.

When you are living in a moment its difficult see that things may have changed. You just think the reality you're living now is normal and how it has always been. This is the Overton window that we have talked about. This window shifts depending upon current trends.

This is the case with the current version of capitalism and free market economics we are living with, there is just an assumption that 'its just the way it is' and 'its how its always been'. But thats not correct. We are living a certain version of free market capitalism now that has developed to this point. Its not the same version that granny and grumpy grew up with and its not the same version that existed in Victorian work houses nor that in 16th Century coffee houses in Bristol.

The Pendulum of Capitalism

If we imagine that its like a pendulum swinging, we know that in Victorian workhouses, the poor were sent to work. Many were mistreated. Not paid a proper wage. They had no rights no sick pay, or maternity pay. They did however work hard to make the factory owners, the owners of the capital, the capitalists, grow wealthier. Then we know there was eventually a backlash against the unfairness of this system. We know that workers organised into unions and it became clear that the workhouse owner didn't in fact hold the power, it was the workers. The capitalists only held the power if the workers were divided and disunited. When organised and together, they were stronger.

The pendulum started to swing back, and probably the era of capitalism that existed in grannys day, was the version where the pendulum had swung back from the Victorian workhouse era as far as it was able to go at that point in time to more fairness towards workers.

The signs that the pendulum had reached its peak were perhaps the organised protests in the 1960s for things like better rights for women and minorities, campaigns against wars in Vietnam and against the nuclear arms race, protests to save the planet, plus unionised workplaces demanding better pay for workers.

If this is right, it means that the pendulum has started swinging back again towards the owners of capital and away from the worker and that is the version of capitalism being handed to you and Generation Z.

Victorian Workhouses and the 99%

When I write this I start to picture Victorian workhouses and coal miners. That was the worker back then. But obviously now, British workers don't see themselves like this.

Today the worker ranges from the Uber driver, Deliveroo rider, Amazon warehouse worker, retail worker, office worker at one end of the scale, along with nurses, teachers, soldiers and administrative Civil Servants, but also professions like Accountants, Doctors, Lawyers and the like. Certainly there is a hierarchy within this group in that many Doctors and Lawyers probably wouldn't want to be grouped with an Uber Driver as a 'class' so its difficult to call this group 'workers'. You certainly cannot call them the Proletariat due to its Marxist connotations. Calling them the 99% is slightly tainted because this has become a phrase of protest, but I am going to with with this. This is the 99%.

The Victorian workhouse owner was illustrated by Dickens in Oliver Twist, greedy, fat and unwilling to give a child more inedible food because it would reduce his profits. He had total control over who ate and who starved, it was undemocratic, giving the worker no say in how he organised his capital.

Its easy to vilify this caricature and overlook the good these capitalists did. He made clothes, he made goods that people purchased and wanted, things that improved their lives, he built hospitals and grand buildings, alms houses for the poor, and concert venues like the hall previously known as the Colston Hall. These are all really good things that benefit all of us even to this day.

There is no such caricature now, instead the owners of capital are:

• Multinational companies.

• Global financial institutions.

• Resource extractors like oil companies.

• The top 10% of the 1% of wealthiest individuals.

These are todays workhouse owners. Like the owner of the workhouse before the workers organised to demand better conditions, these capitalists also do many good things like create shiny phones that I want to buy and help academics manufacture vaccines, and build concert halls. They are lauded when they give money away to people with less. These are all really good things that we benefit from and enjoy.

I can't call this group the 1% because we are in the 1% globally. So lets call them the Masters, the 10% of the 1% where wealth is really concentrated and where undemocratic power resides, just like the old workhouse owners.

Communism

I am not going to argue that capitalism is wrong and that communism is the answer. They are both just economic systems and nothing more. The one similarity both systems have is that they are both religions. Neither is a science, and neither can be right 100% of the time.

When both are taken to extreme then they are no better than any religion taken to fundamentalist principles, it becomes a crusade, people become fanatical, environments get destroyed, wealth concentrates at the top, those at the bottom are told wealth will trickle down or be shared fairly when it won’t, and people die.

Communism was taken to an extreme version in the USSR, it became perverted, as would any system that involves humans, and it failed.

Then you get to other side of this coin, the American version of capitalism which is what we currently see through our Overton window, its the one which calls the provision of healthcare for people based on their medical need; communism, it’s proponents are people who would criticise Obamas Medicare reforms in the US and say its Communist, its people who would accuse AOC of communism because she thinks that the US should do something about climate change to support poorer regions affected by it. This isn't communism, arguing that you shouldn't help the poor and needy is fanaticism and it is against basic human rights, which should be at the core of any religious or economic philosophic system like communism or capitalism.

In text books with perfect human beings pure communism and pure capitalism probably work make sense, we just don't have a perfect set of humans beings in real life, so neither system in its purest form can ever be shown to work, yet we seem to be trying.

The same that happened to communism when taken to an extreme will happen to capitalism, and I believe that the way the pendulum is currently swinging we are being taken to an extreme, fanatical version of capitalism. One which none of us in the 99% really voted for and which none of us want. But there is a group of people who do want this, and that is because they benefit from it, and that is the Masters.

Democracy

So we have capitalism and communism. And we have the Masters and the 99%. The final player is democracy.

When I was growing up, capitalism meant democracy which meant freedom. It was the American way. Its was the post Colonial British way (ignore the hypocrisy from both). And it was the way of a lot of other successful democratic capitalist societies around the world, Canada, Australia, post 1945 Germany and Japan, New Zealand for example.

As a kid it was obvious to me that we were better off than those living in the Soviet Union where even your news was manipulated so that you didn't know what was really going on. Putting aside the horror show that BBC news has become, the best example of this today is North Korean news, but when I was young, Soviet news did not have this ridiculous comedy value that North Korea has today, it felt like a clear and present threat to our freedom and way of life, a real alternative reality where you hoped that you were right and they were wrong.

So when the Berlin wall was falling and the Soviet empire collapsed, the belief was that free market capitalism and democracy was spreading. The cold war was won. But in fact this is not what has happened. Democracy (and freedom) became decoupled from capitalism. Russia and China are the best examples of this. Both communist (China still is) both now huge capitalist economies, neither with a version of democracy that we would recognise and in China, freedoms are significantly curtailed with over 1 million Muslims in concentration camps, or as our future Chinese masters want us to call them, re-education camps because that makes it better!

Democracy is the Problem

For the Masters, this is no big deal. The fact that democracy and freedom haven't reached Russia or China doesn't affect you if you're a Master. In fact democracy is a problem for you just like it was in the workhouse. The reason for this was highlighted by Aristotle, who said that in a democratic Athens, the 99% would vote to take away the money and property from the Masters. However, Aristotle put forward a solution to the problem. Reduce the gap between the 99% and the Masters so that the 99% do not vote to take away the Masters wealth.

Adam Smith, known as the father of today’s modern capitalism also said the same, he said that:

“All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind”

The Masters today would claim to be the disciples of Smith. However, they no longer believe in inequality reduction as the solution to uniting the 99% with the interests of the Masters, instead, they put forward the reduction of Government and the reduction of regulation and the removal of the welfare state, the lowering of taxes. That is the fundamentalist vision of the Masters version of capitalism today. This is where the pendulum has swung and this is the version of capitalism you are living in.

In my view, this is fundamentalism capitalism, its capitalism perverted.

The Pendulum Today

We now have all the main players in understanding where we have reached and the version of capitalism you are living under, we have:

• Capitalism.

• Communism.

• Masters.

• 99%.

• Capitalism with Democracy - old style, welfare state included.

• Capitalism Chinese style - No democracy, Communist party rule, state control.

• Capitalism Laissez Faire - American style, small Government or a plutocracy and no Welfare State.

I will pick up these players and styles of Capitalism in Part 2.