Problems with theory and problems in practice

Regarding a prior post, MightyMerk asked a few good questions about why I take such a dim view of capitalism. You can read the whole original post and the ensuing comments here. I'll try to elaborate on my initial responses, beginning:

"Regarding Marx, you just have to tell me what exactly he was ever right about?"

That's a tough question because it's often difficult to separate, in the bath house of public opinion, the ideas of the man from the ideas of his followers. When those followers have a track record of 100 million dead in 8 decades of megalomania, everything that inspired it seems to take on a more sinister pallor.

I am not a Marxist. Strictly speaking, neither was Stalin. Similarly, Marx was not Mao. Remember that even Stalin was not Mao, they were bitter enemies. Communism in the Soviet Union, China and around the world was far from uniform and did not revolve around the Communist Manifesto. Though it was the impetus for these revolutions, the revolutionaries ultimately had very little to do with it. Remember also that Marx did not begin and end with the Communist Manifesto.

Marx was a theorist and philosopher and an economist. Like many and indeed all people who propose something radical in social theory and justice, it was to address a specific problem (Plato's Republic for example) within the society that person lived. If Plato were judged by The Republic alone, he'd have gone the way of Heraclitus, he'd be esoteric cannon-fodder.

That is to say: often, if not always, the proposed solution outstrips the observation. Often, if not always, the person tries too hard to fix everything and fix it at a fundamental level. Marx's communist ideal is very much a utopian (from Greek ou not, no + topos place) yearning. For that reason communism can never be a viable instantiation of Marx's pure social theory. Similarly, there will (hopefully) never be pure capitalism, because of the innate problems Marx sheds light on.

Like Plato's Republic, there's a lot about his new society that could never function. That does not, however, diminish the critique of the existing society Marx puts forth. Aristotle was asked by some Greek ruler (don't remember names) to apply his Philosophy and other, more Platonic concepts into making that ruler's kingdom more perfect. Aristotle was dismissed months later. His solutions didn't work, but that does not mean he didn't identify the right problems. Marx saw the problems, but didn't propose the right solutions--this is something we only now know in hindsight. His observations, however, remain valid and pointed to this day.

***

In the act of reification (a term coined by Georg Lukacs) of capital, money goes from being a bartering tool, a tool of trade between equals, into an end in itself. Remember, it's called capitalism, not, people-using-money-ism. In pure capitalism, people are secondary to the accumulation of capital. Capital becomes an end in itself, able to reproduce itself. It becomes the most important thing in the system, diminishing the very humanity of the people that exist within the system.

People are only as important as the capital they own. Even in our own imperfect capitalistic society, we see this as the functioning imperative. People with money have power in business and politics. Power in business facilitates the propagation and increase of power. Power in politics ensures that the power game will continue to favor those who have power. The "haves" as you call them, will remain haves.

That's fine, if you have it, use it and use it well. But the problem is that most "have-nots" will also remain have-nots. The problem is not economic disparity in itself, though it's tragic and debilitating. The problem is that economic disparity in this country is rigid, and despite the few free floating upper-middle class folks, the glass ceiling is generally impenetrable. There are and always will be exceptions to this rule, which proponents of unfettered capitalism will tout as proof that free markets make free people. However, these case studies are ultimately outliers that don't reflect the general and pervasive trend.

The haves draw their power from the companies they own/control.

For companies in theory, and corporations as part of their existence as a legal entity, workers are only important as a cheap means of producing the thing that produces capital. They are, essentially, overhead.

Workers are usually the "have-nots"

Capitalism cares about nothing else besides creating more capital. Look at corporate law in America, the only people a corporation answers to are its shareholders, the only yardstick for success or failure are profits--the relative income of capital against the loss of capital.

The easiest way to staunch the outgoing flow of capital is to under pay workers. This is much easier than reducing other forms of overhead. The "Lean Manufacturing" technique pioneered by Toyota and currently shit-hot in America is another way, but it's expensive and time-consuming. Then, once you're done "leaning," you can still cut salaries or benefits or work to pass legislation ending overtime compensation. This is called remaining competitive. Within the current American Corporate paradigm, this is exactly what companies should do.

Was remaining competitive, though, done ethically, are the workers living decently, are things in place to keep them living decently? Was regard paid to the people who are essentially driving the power of this company? Or are they being under-compensated?

These are the bleeding heart questions. These are questions that the American government, in its corporate legislation, doesn't care about. These are the things that the most powerful shareholders don't care about because it detracts from fiscal solvency. These are things that CEOs aren't allowed to care about, for it means stifling profit. Intentionally stifling profit is illegal in this country.

Profit is made one of two ways, by selling a good or service for a greater cost than it took to produce it, and by allowing capital to grow by means of investment.

Now, if you sell something for more than it takes to produce it, you are in effect cheating workers out of the value of their work. It is argued that management does work as well and must be taken into account. This is true. Even so, at the end of the day, if the company is cash-positive, someone has been screwed. It might have been the CEO, but it's usually the petty worker.

My note: This is a fundamental and intricate argument of Marx's, one that more or less spans a thousand page book and that I'm really glossing over here, so before you turn your criticism to my poor summary, read Das Kapital.

To which many people retort: "Still, they're being paid and having a job is better than not having one."

The idea here is that if there is more capital around, and people are making more capital, their lives will be enriched by this possession of capital. Interesting theory.

But the creation of new capital through the accumulation of interest creates inflation. Currently in America, the median wage increase is not enough to keep up with inflation. The median wage increase (not to be confused with the average increase, which is much lower). Everyone below that actually has less purchasing power than they did previously.

Merk, you're probably correct in saying, "There are always going to be the 'haves and have-nots." But when the thing that a majority of Americans 'have-not' is access to affordable healthcare, when their children do not have access to even the most basic of education that would give them a better chance of becoming 'haves', then what government is doing is allowing those with power to keep their power and expand their power while having a pool of cheap labor to aid them without any real benefit or loyalty to the people who have made them this capital.

It's a more subtle instantiation of the company store. So, merely making more money does not necessarily equate to having more power, the system is on a curve.

"People are not perfect, and prone to greed and don't like to play nice etc."

That's the most true thing you said. People are radically self-interested. Capital is more self-interested. Human beings at least have the ability to empathize and identify problems, to understand suffering and to change it. Humans have the capability of wanting to level the playing field and the capability to do it.

Now, we can keep with the capitalist ethos and allow the rule of the free market to continually reward the haves and punish the have-nots by keeping from them even the most basic liberties, or we can recognize the short-comings of the system and put in place programs that allow for the elevation of Humankind above the drive of capital.

This includes: Salaries that outstrip inflation at the absolute minimum, equal education for everyone, affordable secondary education (more need and performance-based grants and scholarships), affordable healthcare for everyone, et al.

Now if corporations and other employers would do this voluntarily, then by all means, have at it capitalism. But as long as these systemic structures are in place and as long as corporations are only legally bound to create profit, then all those squirming meat-bags of downsizeable overhead need legal structures in place to protect their rights and offer the chance to wield real power within the system. To do otherwise, to maintain a classist system, is to court revolution. It happened in Russia, China and elsewhere. The revolution eventually failed. That does not mean however that what the people were revolting against was ultimately proved the right and just system, just the more powerful system.

What I advocate is not revolution, it is the avoidance of the oppressive structures which lead to revolution. It is a swallowing of nationalistic pride and an open mind. It is a conscious and dedicated effort to meld the positive aspects of both [several] systems regardless of whether something is considered capitalist, socialist, communist--whatever. It is allowing people to succeed within the system so that they do not have to seek revolution outside the system.

Liberty is not laissez faire, laissez passer. It would be if everyone started at zero. Liberty is a [more] level playing field.

"Attacking Capitalism because it is not perfect is rather a cheap shot in my opinion . . . As far as I am concerned America and capitalism is the best WE HUMANS have had so far."

Simply being the current best doesn't mean it's good enough.