What is capitalism? Why should it be opposed? Does the current crisis mark the beginning of capitalism’s end such that we’ll be in some new social formation(s) by 2040? What is the relation between higher education and rising tuition on the one hand and capitalism and neoliberalism on the other? Finally, what are some principles around which left strategy might orient itself in the struggle to build a radical democratic egalitarian alternative to capitalism?
I think these are important questions and, given the limited space, will briefly respond to them here. Nothing I say here hasn’t already been said: I’ve included citations and suggestions for further reading so that you can pursue these ideas at greater length. Because this guide is aimed at university students, I presume you, like me, find truth in the old adage that knowledge is power. If we are to overcome and subdue structures of domination and injustice and build better social institutions, we’ll need some sophisticated knowledge. Thus, rigorous and continual education—reading, writing, critique, debate, and embodied experience—is a necessary precondition for social emancipation. I hope this essay contributes toward that end.
WHAT IT IS
I foreground capitalism here for three reasons. First, capitalism is important: it’s a key social structure now spanning the entire globe and determining to a significant extent the nature and quality of life on Earth for humans and non-humans alike. Second, capitalism is not necessary: other social formations have preceded it and will succeed it. Third, activists on the left appear to lack a decent understanding of it. Something which significantly determines the world, is causing significant harms and injustices, and which can be gotten rid of–and yet, is not well understood by activists–suggests to me it’s worth writing about.
This essay is about capitalism and thus holds for any purported variation of it, e.g., so-called conscious capitalism, green capitalism, etc. Because describing what capitalism is is a big task, my response is necessarily limited to briefly discussing its defining features. I should also note that I approach capitalism largely from a framework grounded in Marxian political economy. Although my undergraduate education included numerous classes in the economics department, my experience working in an investment and technology firms has since indicated to me that neoclassical economics often both obscures important political and moral considerations and can present misleading view of what actually-existing capitalism is like and how it works. I’ve since found Marxian and Neo-Marxian theoretical framework to provide a much more compelling and powerful way to understand capitalism, particularly as it pertains questions of social power.
All that said, let’s try to define it. Capitalism is a social formation in which the primary objective is the endless accumulation of capital (Wallerstein 2004: 23-4). To be sure, objectives other than the endless accumulation of capital can and do exist in capitalism. For instance, the objective of many non-profit institutions is not to accumulate capital but to care for marginalized and exploited humans and non-humans. Nevertheless, even non-profits are constrained by the endless accumulation of capital because all non-profit-producing institutions in capitalism ultimately necessarily obtain their funding from capital and must be subordinate to that aim. Moreover, many non-profits are constrained by the interests of their major funders which are, as we should expect, wealthy capitalists (or the “philanthropic” foundations they create). Thus, what it means for the endless accumulation of capital to be the dominant objective in capitalism is that, in situations of conflict with other aims, the endless accumulation of capital must be systematically prioritized, whether by excluding these other aims or subordinating them.Three other core features can be said to define capitalism: i) private property in the means of production, implying a class division between owners (capitalists) and producers (workers), ii) a “free” labor market in which workers are both freed from bondage to a particular master (as in slavery or feudalism) and freed from the means of subsistence and production, i.e., the resources which would enable them to be free from the labor market in the first place, and iii) markets in which agents privately contract with one another to exchange commodities (Fraser 2014).
It would be wrong, however, to think that in capitalism everything can be turned into a commodity to be sold in the market. Indeed, at least three key entities within capitalism can not be commodified: i) social reproduction, including the work of caring for and renewing social bonds, housework, child-raising, education ii) the work performed by non-human natures, including rivers and streams, a hospitable climate, bees and other pollinators, the nitrogen cycle, evaporation and condensation, various bacteria, photosynthesis, the ozone layer, and iii) the work of public powers, including enforcing the legal institutions of private property and contracts, adjudicating disputes, guaranteeing the value of money, and quelling anti-capitalist social movements (Fraser 2014; see also Moore 2014a: 291-6 and Moore 2014b).
If capitalism is a social formation predicated on the endless accumulation of capital, what is capital? Capital is both a thing and a process (Harvey 2014: 70-1) and can be understood as money which is perpetually seeking more money. While all capital must therefore be convertible into money, not all money is capital. For instance, the money you use to purchase and consume a meal is not capital because the money is being used for consumption, not investment. If you had so much money that you didn’t have to use it all simply to purchase and consume the commodities necessary for you to live, and you further decided to invest some of this extra money by purchasing ownership in a business, this money would turn into capital because it would now be seeking to accumulate itself through the production of profit. In short, money is not capital when it buys stuff to be consumed; money is capital when it’s in the process of its self-expansion.
If capital is money in the process of its self-expansion, how is capital produced? While there are a number of ways, the major formally legal way capital is produced in capitalism is when an owner (a capitalist) takes a bunch of money and buys means of production (machinery, land, and raw materials) and labor power (the capacity to work that workers sell as a commodity), and combines these two to produce a commodity that the capitalist then sells on the market for more money than was used to produce the commodity (Harvey 2014: 71-2). Marx devised a formula to represent the process: M–C–M’ or M–C(MP + LP)–M+Δ where M = money, C = commodities, MP = means of production, LP = labor power, Δ = a profit, and M’ = M+Δ.
The first section sought a general and abstract understanding of what capitalism is by focusing on its fundamental, i.e., non-optional, features. Similarly, the criticisms of capitalism in this section are fundamental to capitalism and thus can not be eliminated through reform. So long as we’re describing capitalism, these criticisms will hold.
Much has been written from the left about the criticism of capitalism and alternatives to it, often under the rubric of various socialisms, anarchisms, and communisms but I’ll here primarily rely on Erik Olin Wright’s succinct formulation of why capitalism should be opposed (Wright 2010: 33-88). Wright first identifies four normative principles associated with social emancipation: equality, democracy, community/solidarity, and sustainability. He then proceeds to argue why and how capitalism significantly undermines these principles. The bare-boned outline of his argument is as follows.
First, capitalism severely limits equality and social justice because the inequality capitalism generates produces both poverty (which could otherwise be eliminated) and highly unequal access to the resources needed for a flourishing life. Second, capitalism significantly undermines democracy because it structures power relations in a highly unequal way through its class stratification and private property institutions which prevent people from having roughly equal say in the matters affecting their lives. Moreover, the state in capitalism is rendered structurally biased toward the interests of capital and the very wealthy (Chibber 2011), further undermining democracy. Third, while capitalism tends to (but does not do so completely) break down some former hereditary-based status hierarchies, it undermines community and solidarity by promoting greed out of the need to accumulate and fear out of the real possibility and outcome of losing in competition. Finally, because capitalism requires endless compound growth, it undermines sustainability, manifest most starkly through climate change, because its requirement for endless exponential growth requires it to extract, use, and dispose of an ever-growing amount of matter and energy. Efficiency reduces the amount of resources used per unit of economic growth but is still in conflict with sustainability because i) efficiency often lowers per-unit costs of using a given resource and thus increases total use of that resource and ii) efficiency can not reach 100% and thus its gain are eventually outstripped by an economy which is growing at an exponential rate.
THE END OF CAPITALISM
Even if we now have a better grasp of what capitalism is and why it should be opposed, isn’t capitalism unavoidable? Can it ever end? If it can, can only political mobilization end capitalism; or, can it unravel on its own by reaching its internal limits?
Social scientists have long asked whether capitalism could and would end and what might cause it. More recently, since the 2007- financial crisis a growing number of scholars are finding reasons to seriously question whether capitalism has the capacity to survive the next few decades (Wallerstein and Collins et al. 2013; Streeck 2014; Harvey 2014: 214-97; Moore 2014b) In the recently published Does Capitalism Have a Future?, five eminent sociologists convene to ask not whether capitalism is a good or bad system, but simply: does it have a future, not just over the long run, but over the medium-run of the next few decades (see reviews of the book here and here)? Their debate is highly stimulating in large part because they don’t all share the same conclusions and at under 200 pages, the book is worth reading in full and can be done so in a weekend. All five study the rise and demise of societies over the long sweep of history and all agree the world has now entered a period of heightened uncertainty and tumult: the global political economy will be changed in unpredictable ways. Two of the five scholars—the same two who correctly predicted the fall of the USSR and specified in advance the causal pathways of its breakdown—now argue capitalism is reaching the end of its rope, through mechanisms they specify, and that the world will be in some new social formation(s) within 30 years, c. 2040. What comes after capitalism remains to be determined and whether it will be better or worse will largely be determined by political struggle now and over the next few decades. As a publication intended for activists, this is clearly relevant.
Serious questions about the health of capitalism aren’t only being posed by the left. Indeed, three prominent economists and supporters of capitalism, Larry Summers, Paul Krugman, and Robert Gordon, have written they’re concerned capitalism has entered a period of lowered growth, “secular stagnation” (Summers 2013; Krugman 2013; Gordon 2012)
In sum, capitalism’s viability is not as secure as it might seem. Activists need to be aware of these structural forces given their significance to the formation of short-, medium-, and long-term goals, strategies, and tactics.
THE MEANS OF (KNOWLEDGE) PRODUCTION
The University of California is not separate from capitalism, it is embedded within it. Like every institution which doesn’t produce profit, it depends on capital for funding. As a public institution, the UC is to be funded, in principle, by government tax revenue (recall that governments, because they don’t significantly own the means of production, must tax capital to acquire the money needed to fund its operations.) What percentage of the UC’s funding would you estimate comes from the government in the form of guaranteed funding? You might be surprised to learn that for 2013-4, just 10.4% of UC’s funding comes from “state general funds” (see pp.S-6 of the UC budget report). While another 15.5% comes from “government grants and contracts”, these are considered “non-core” because they are not of the same quality as the “core” general state funds. The decline in government funding to the UC has been accompanied with rising tuition and fees such that the UC now receives more money from tuition and fees than it does from core government funding (ibid.)! These are but a few of the results of years of the neoliberalization of the UC, due in no small part to the practices of senior administrators, including the various campus presidents and the Regents.
Raising the tuition and privatizing the funding of public higher education has several significant political effects. First, raising tuition reduces the number of people who can access it because access to it is increasingly governed by ability to pay (recall that capitalism produces a highly class stratified society). As the price goes up, and increasingly squeezed working class finds it difficult to afford without going into debt. Thus, the second effect is that price and/or indebtedness disciplines students and their families to reimagine themselves less so as students and more so as future employees and entrepreneurs and to reimagine the university less so as a place to develop critical thinking skills and critical knowledge—perhaps of racism, patriarchy and sexism, social justice, and capitalism, etc.—and more so as a marketplace to acquire the skills and social networks to make oneself into a competitive future employee or entrepreneur. While the first is perhaps obvious, the second is more subtle but just as important. Finally, privatizing the funding of public higher education reduces its democratic accountability and curtails academic freedom. Whereas indebtedness can discipline students and their facilities toward majors which teach business, science, and engineering and away from critical social and political theory, privatizing the funding of public higher education introduces pressures to defund the departments which pursue critical studies of subjects like capitalism. If the means of knowledge production, including universities, are increasingly funded by the wealthy, i.e., the capitalist class, you can bet they will be less interested in funding social science and humanities departments which produce critical knowledge of capitalism and other structures of domination. And even if department funding doesn’t change, faculty hiring decisions and what new programs are created increasingly come under the purview of the funders’ political interests. The Democratic Socialists of America have published a flyer on higher education in capitalism readers of the disorientation guide might find helpful (see here).
So, what can be done? Although the right has won the battle of the last 40 years since Ronald Reagan’s presidency (Harvey 2005; Robin 2011), the left is not dead and there are reasons to believe it might be resurgent, even if it’s still historically relatively unmobilized. I here mention and reference some ideas by three distinguished scholars for what it is to push back against, what to push for, and how to do it so that we may transform society into a radical democratic egalitarian society beyond and better than capitalism.
Immanuel Wallerstein, former president of the International Sociological Association and who has perhaps most clearly and consistently argued that capitalism is already in its final crisis and will end around 2040 (e.g., Wallerstein 2011; Wallerstein and Collins et al. 2013), has identified a few goals for the left in this period of transition. In the short-run, he stresses the goal should be to minimize the pain of the weakest individuals, households, groups, and states in the world and this often means choosing the so-called lesser of two evils. In the medium-run, however, the goal must be the opposite: rather than settling for centrist solutions, the goal should be to push toward the radical left alternative. To do so, he suggests the following objectives: i) emphasize serious intellectual analysis throughout populations around the world, not just academics, ii) reject the goal of economic growth in favor of maximum decommodification and buen vivir (the good life), iii) create local and regional self-sufficiencies in the basic elements of life, such as food and housing, iv) end the existence of all foreign military bases, and v) aggressively undermine the social inequalities of gender, race, ethnicity, religion, sexuality, etc. (Wallerstein 2011) In many ways, Wallerstein’s recommendations echo the goals of the “degrowth” social movement.
David Harvey, prominent Marxist geographer and one of the most highly cited authors in the humanities, offers 17 ideas for political practice which follow from what he identifies to be the seventeen contradictions of capital (Harvey 2014: 194-7; see online here).
Erik Olin Wright, a prominent Marxist sociologist and the recent president of the American Sociological Association, focuses on the question of transition from capitalism to a radical democratic egalitarian alternative in “Part 3: Transformations” of his book Envisioning Real Utopias (Wright 2010: 273-374). He identifies and elaborates three logics of transformation—ruptural, interstitial, and symbiotic—and offers concrete examples of what actions within these logics could, and do, look like.
40 years of neoliberalization have produced an America that is today amongst the most unequal it has ever been. Public higher education is under attack. Racism never left us. Neoliberalism is being refreshed through its re-branding as libertarianism. On the other hand, however, Occupy Wall Street, with its slogan “We are the 99%” re-injected a discourse of class and capitalism back into the mainstream American discourse. After being crushed by the state, the labor movement is regaining some militancy: BART workers have gone on strike; Wal-Mart workers are organizing; fast food workers have gone on strike; and this past spring saw a UC-wide strike by graduate student workers. Seattle elected its first openly socialist city council member. There are efforts in several places to raise the minimum wage. Discussions of a universal guaranteed income are increasingly back on the table. Perhaps more significantly still, yet greater space for radical alternatives may be opening if capitalism is itself breaking down. The best we can do is to remain constantly engaged in serious intellectual analysis, get organized, and push society in the direction toward greater democracy, equality, and freedom. That, I think, is the task ahead.
Chibber, Vivek. 2011. Capitalism and the State. See here.
Fraser, Nancy. 2014. Behind Marx’s Hidden Abode. New Left Review.
Gordon, Robert. 2012. Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds. National Bureau of Economic Research. See here.
Harvey, David. 2005. A Brief History of Neoliberalism. New York: Oxford University Press.
—. 2014. Seventeen Contradictions and the End of Capitalism. New York: Oxford University Press.
Krugman, Paul. 2013. “Secular Stagnation, Coalmines, Bubbles, and Larry Summers.” New York Times. See here.
Moore, Jason W. 2014b. Cheap Food & Bad Climate: From Surplus Value to Negative-Value in the Capitalist World-Ecology. See here.
—. 2014a. The End of Cheap Nature. Or How I Learned to Stop Worrying about “the” Environment. See here.
Robin, Corey. 2011. The Reactionary Mind: Conservatism from Edmund Burke to Sarah Palin. New York: Oxford University Press.
Streeck, Wolfgang. 2014. How Will Capitalism End? New Left Review.
Summers, Lawrence. 2013. “Why stagnation may prove to be the new normal”. Financial Times. See here.
Wallerstein, Immanuel and Collins, Randall et al. 2013. Does Capitalism Have a Future? New York: Oxford University Press.
Wallerstein, Immanuel. 2011. “Structural Crisis in the World-System: Where Do We Go From Here?” Monthly Review. See here.
Wallerstein, Immanuel. 2004. World-Systems Analysis: an Introduction. Durham: Duke University Press.
Wright, Erik Olin. 2010. Envisioning Real Utopias. New York: Verso Books. Find the full book here.