A Little Story About You, the Capitalist (Capitalism Can’t Be “Less Greedy” – The Greed is Baked In)
[This first appeared in Skewed News]
[Note: This is written after several people have recently asked me to explain why I always say that capitalism can’t be fixed. One specified: say it in a way that isn’t boring or difficult to understand, and even a little bit funny.]
More people lately are identifying capitalism as the underlying cause of our current global troubles and crises. That’s certainly positive: the first step toward cure is a proper diagnosis. But most of the approaches being offered to treat the problem are placebos, an endless supply of ineffective remedies to “fix” or reform it, to make it “less greedy.”
Getting the greed out of capitalism is impossible, and we’ll just waste precious time by trying. All capitalism’s problems are baked in, integral to the way it works. Capital must expand, buy up or destroy competitors, reach into every corner of society to try to squeeze money out of it. It naturally accumulates, concentrating wealth in the hands of the few at the expense of the many. That’s not a mistake. That’s what it does. There’s no other way it works. The problem isn’t extreme capitalism, corporate capitalism, or greedy capitalism. It’s just capitalism.
Let’s try a thought experiment to make this more concrete. Let’s take you through the process of becoming a capitalist. But because you’re a nice person and not a greedy motherfucker like other capitalists, you’re going to be different.
Ok. Imagine you manage to scrape together $50,000 by scrimping and saving and borrowing money from your parents. (Inheritance is actually how most capitalists get their start – it’s not because they’re so smart or hardworking, as they’d like to have us believe). Now, what are you going to do with it? You could piss it away on drugs and fancy shoes. Or you could do what most people would consider the intelligent thing to do in a capitalist economy: make the money “work for you,” so you and your family could live on the income it generates instead of being ground down all your lives by shitty jobs. This is a very reasonable goal, which no one would argue with. Now, while you are not yet a capitalist, that money has become capital. If your plan is successful, it may make you become a capitalist.
Once you decide to invest it, you have to decide where would give you the best return for the least risk. Unfortunately for you, today the economy is in the late stages of a structural crisis, saturated, with every niche overcrowded, glutted with so much accumulated cash that most investment opportunities pretty much suck.
It’s slim pickens out there. Interest rates are coughing up dust. The stock market, floating somewhere completely detached from company value, is a casino where the biggest players always win. Inflation causes cash to slowly bleed out. Metals have lost ground, bitcoin isn’t real, commercial and residential real estate is in a bubble, and buying a tract of land in Maine and letting it sit there doesn’t leave you with enough liquidity to pay your bills. So you’re forced to conclude that the return on any kind of passive investment of $50,000 would just be a joke.
Deep breath. You decide to start a business. Everyone always said they love those adorable baby hats you knit, and you even sold a few to friends-of-friends, so you decide to produce those and sell them online. You pump yourself up into a state of wild optimism, buy a bunch of yarn at Michaels and get to work, spending every waking moment of the next few weeks knitting while listening to high-energy “how to be an entrepreneur” podcasts. You set up all your accounts: Paypal, Mailchimp, WordPress, eBay, Facebook , blah blah blah, and consolidate the email addresses of all your friends and relatives so you can hit them up when you’re ready.
Finally, you launch. A few people buy your baby hats! Yay!
You’re pumped. All right, there is a way out of wage slavery! Instead of working for someone else, you can work for yourself! Work smarter, not harder! It’s about making ideas happen! Whatever you can believe, you can achieve! And the one about working on your business, not for a business, or whatever. All those slogans are right!
Let’s say that after six months or so, with monumental perseverance, a reasonable business strategy, and careful spending, you beat the odds and generate a positive cash flow. You sell all the baby hats you can possibly knit. You even enlist your mom (a kind, patient soul) to help you keep up with demand.
Then you start getting a backup of orders. Finally it becomes apparent that you need to hire someone. Your friend happens to need a job – it’s kismet! You apologetically start her off at minimum wage, but hope to raise that as you get more of a cushion. She’s understanding, willing to sacrifice by allowing you to extract an obscenely high rate of surplus value from her labor power, in order to help you get your enterprise on its feet. All your available cash is needed to advertise, buy supplies, and ship. You’re starting to see the need for storage space other than your spare bedroom, so there’s that expense coming up too.
Clearly, with growth starting to happen, it’s time to take out a bigger loan. You borrow another chunk from your uncle.
Things are progressing nicely. You’re paying your parents and uncle back in regular installments, while keeping your head above water and paying your expenses. But then one day as you’re searching for peppermint floss at CVS, you see something that makes your blood run cold: a baby hat, eerily similar to yours. On a shelf. For sale. That you did not make. Some asshole evidently saw your baby hats, stole the idea, and produced a cheaper, uglier version of them.
A competitor. Fuck. If you’re going to beat it, you need to go on the offensive.
You nervously put down a few thousand dollars to attend a trade show. And get several large orders from retail outlets! Woo-hoo! It’s really happening! Winning!!! WIN-NING!!!!! !!!
But holy shit, how are you going to knit enough baby hats, even if you hire all your friends at minimum wage?
You go to the bank. You secure a hefty loan that’ll get you through the next growth spurt quite nicely.
Somewhere you’ve heard of Alibaba and now you look it up and discover it would be a whole lot cheaper to get the baby hats made in China. You realize this is kind of wrong – “Made in the USA” is something you always believed in as a patriot, and China has tyranny and sweatshops and all that. But bottom line, you can’t beat the price. And your expenses are rising. So you arrange for manufacture, and it’s pretty easy and straightforward. You start with a small batch to see how it goes. You rent an office and a warehouse. You regretfully have to let your friend go. She really doesn’t know how to do anything but knit, and even minimum wage is too high to pay when you have that competitor breathing down your neck. You hope she understands.
She doesn’t call you much after that. Ever.
That’s ok. You need new friends anyway, go-getter friends who are more on your level as an up-and-coming entrepreneur. Ones you can network with, form mastermind groups with, ones who can benefit you.
As your business grows, it moves into realms of complexity that you don’t understand at all. You’re losing control of the bookkeeping, the finances, customer service, marketing and sales. You hire smart, eager young business school graduates to help you run things. They do a pretty good job. This fact is indicated by your growing bank account. You’re moving into a level of profitability that not only sustains the business, but also allows you to elevate your lifestyle accordingly. You feel very happy to be able to buy your mom a new car, diamonds for your wife, send your kids to a good college. You enjoy making them smile, making them proud of you. Life is good.
You expand your product line: orange baby hats that tie under the chin, magenta baby hats with earflaps, puce baby hats with puffballs on the crown. They’re a hit – a home run! Soon you start dreaming: every baby in the United States in your baby hats! Yeah! You start getting orders from department stores in Europe and Australia. Every baby in the whole damn world! You are on fire!!
But competitors are riding your ass hard. Though you’ve secured the account at BabyMart, lower quality baby hats are appearing on the shelves at BabyCo. They’re cheaper than yours. They’re made in Cambodia. Their sales are going up. Yours are going down.
You lower the quality of the yarn and remove some of the charming details that no one seems to care about anyway. You dump the China company and hire one in Cambodia that will do it for 2 cents less per unit. (If the factory in China lays off a few workers after the loss of your account and their kids go hungry, you will never know about it, so let’s not even mention that). You like the liaison for the new factory, who is very responsive to your needs and meticulous about getting the product right. You really don’t know how they get it done so cheaply, but you don’t have time to worry about it. They deliver the goods at the right price: that’s all that matters.
Your business expands rapidly with new product lines. Baby toe socks. Baby cravats. Baby cropped vests. You have regional warehouses set up with state-of-the-art inventory management technology and compliant workers accustomed to working for peanuts (thanks Amazon!). You hire a logistics company to take care of getting all the goods where they’re supposed to go. You don’t dig into the details of how they do it; that’s their headache.
After much agonizing and discussion, you decide that it’s time to take the next big step: launching an IPO. It’s successful! The stock jumps 26% on the first day and holds up. You go on the offensive and buy up your strongest competitors, but don’t raise the product quality back up because people keep buying the stuff anyway, so what for? Your stock rises nicely with each quarter as long as you keep cutting costs. You give your highest executives big bonuses (and yourself too, you deserve it) to keep them motivated in their quest to constantly locate synergies and eradicate inefficiencies.
One morning you get a memo that some Cambodian villagers are protesting about pollutants from the factory spilling into their drinking water. The dye for the yarn, or some shit. There’s an attached photo of a red lake with frothy stuff on the edges and piles of rotting fish. Gross. You wrinkle your nose. You assign someone to cooperate with a respected international watchdog agency to investigate. They travel over there to wrangle with regulators, government officials, the factory owner, and the villagers, and somehow the mess gets resolved. The water’s still toxic, but the villagers have been paid off and relocated. Your stock dips slightly but doesn’t tank, so: crisis averted! Whew.
Then the damn workers start rioting over their pay. They bust up some machinery and burn a police car. You are flabbergasted. Why would they destroy the factory when it’s the only thing providing them a living? You shake your head. Well, that’s how people are in those kind of countries: irrational and hot-headed. You instruct your fix-it guy to threaten the factory with relocation. He goes over there with a suitcase of cash to grease the palms of a few key government officials and business-friendly labor leaders. Somehow the problem gets resolved.
One day a factory you never heard of burns down and a bunch of workers are killed. As you scan the article, a passing pang of sympathy runs through your mind: “Poor bastard, whoever contracted with that one, they’re in for a media shitstorm.” But when you get to the office you find out that the middleman company you hired had subcontracted out some of your production to them. There’s a photo circulating of burned corpses clutching scorched baby hats, your logo prominently visible. Shit. This gives you pause. You feel kind of bad. Not lose-sleep-bad, but still, for about five seconds—no, eight—you vaguely imagine some sad Cambodians whose families might have been affected. But you tell yourself that it’s not your fault – you didn’t know. They should enforce the regulations better over there – it’s the corruption. That’s on them. You didn’t force them to work there or tolerate an autocratic government imposed on them by imperialist machinations along with a layer of rapacious bureaucrats. They made bad choices.
The news hangs in the air for days like a bad smell. Some newspapers aren’t letting it go, writing sensationalist things about your company, digging to find every little insignificant thing they can possibly complain about. They’re just looking for a story, and if it bleeds it leads. Your marketing department knows what to do: you don’t even have to ask. They make sure all the news outlets attend a press conference to see you donating a generous check and a cargo load of baby hats to the dead-worker-family fund (carefully expressing heartfelt sympathy while admitting no wrongdoing). They phone the editors to casually inquire if they still want your company to buy ads. The fuss becomes yesterday’s news.
Not more than a week later you’re having an important meeting with potential clients in the big conference room, and you hear distant shouting. Everyone tries to ignore the faint noise at first and push through on negotiations, but you see the client rep keep glancing out the window, down at the parking lot far below. You need to appear decisive in front of them if they’re to judge you a worthy supplier, so you buzz your secretary, ask what the fuck. You listen to her explain that there’s a protest outside – something about sweatshops. You tell her firmly: tell security to escort them off the property. If they can’t handle it, have them call the cops. Because that’s what the cops are for, right? To ensure your safety from the mob, so your business can run smoothly. You can’t have social disorder, damn it. That costs money every time.
When you get home, aggravated and sweaty, your sympathetic wife gives you a whiskey sour and a pretty decent blowjob. You lie there afterward and reflect on the fact that by your hard efforts, intelligence and grit, you’ve come a long way, from a lowly hobby knitter to massively triumphant baby accessory tycoon. You remind yourself that making progress just means making bigger mistakes. You resolve to give back, maybe donate some money to a university for expanded business school facilities, to help deserving young people enjoy the kind of success you’ve achieved. You go to sleep feeling much better.
The next day, more sign-waving protesters cluster in the parking lot. They try to block you from entering the building! That’s some fucking nerve!! A phalanx of cops pushes them back and knocks them around a little. Some are carted off to jail while you are escorted inside, unharmed thank god. The ruckus gets on TV. Some asshole is yelling into the camera, something about justice or whatever, and names your company, names you. He uses your name and calls you a greedy bastard.
Not much bothers you; you are generally easygoing. But that kind of hurts. You have never been greedy in your life. You always give more than you get. Hell, hundreds or even thousands of people wouldn’t even have jobs if it wasn’t for you. Millions of babies would not have adorable hats keeping their precious little heads warm. You uplift the economy, give to charity, treat everyone around you with courtesy and unfailing politeness. You lavish gifts on your friends. You tip generously.
Fuck them. They don’t know you.
Your people, as usual, know what to do. A notice is circulated in activist circles that your company’s charitable foundation is going to be offering grants to “make a positive difference for social justice and empowerment.” As the applications pour in, the noise dissipates. Even the diehard radical fringe straggles out of the parking lot, ignored.
That story, in broad strokes, is the story of every capitalist. You think you’re self-made, but capital dictated every step you took. Whatever your emotions and intentions are or ever have been is now beside the point. Somewhere along the line, you became capital’s bitch.
Capital has its own relentless drive, never to be satisfied, feeding ever more hungrily on the life-force of the world while leaving mountains of destruction and misery in its wake. It can’t do otherwise.
Forget trying to fix it. It needs to be stopped.