Monday, May 13, 2013

Is Capitalism Evil?

Alternative titles: Corporate Calumny, Evils of Industry, Venture Villainy. I like alliteration alot.

Or: Why You Shouldn't Be Surprised When a System Designed to Act Like a Sociopath In Fact Acts Like a Sociopath


A few things happened recently to spark my thoughts on this. One was that I shared this pithy piece by Avicenna over at Freethought Blogs which rightly derides alternative medicine. Why is it at all acceptable to tout alternative medicine? No one would go to an alternative dentist. An alternative dentist wouldn't be sticking it to Big Teeth; he'd just be some jackass who pulls out his own teeth.

A friend of mine responded not so much defending alternative medicine as attacking the business of medicine. I may have misinterpreted (and if so I'm sorry; you know where to find me, dude), but his argument seemed to boil down to the conclusion that "Doctors medicate too much and this is bad." I tentatively agree with part of this. Overmedication is bad, particularly with antibiotics, however I don't know that doctors do routinely over medicate or "throw medicine at the problem". If they do, that's certainly bad. A quick google search indicates this is a fairly popular view, but it's not actually what I want to talk about today, so I don't care to wade into it.

Another portion of his argument was that doctors are under pressure from Big Pharma to prescribe medication, thus explaining why it's happening (assuming that it is). That's certainly a reasonable position and presents an excellent prima facie case for investigating whether that's happening. I and many others agree with my friend that the commercialization of medicine has harmed the profession and its standards as a whole. The profit motive doesn't mix well with the health industry.

The other item that sparked this line of thought was this youtube video by jordanowen421, in which he takes a look at some presentations by Gale Dines, an anti-pornography feminist. FYI, he disagrees with Dines and thinks her anti-porn stance is bad for feminism. I agree; porn is pretty awesome when done right. A lot of it isn't, though. At one point he expresses some confusion by some arguments/points she makes regarding pornography's for-profit status, and specifically draws from trade magazines to attack them. The gist is that pornographers are in it for the money, they're making profit, and that's all very bad2. Now, anything drawn from a trade magazine has strong potential to sound skeevy, because it's going to be discussing the business of business, and maximizing profits, which will always sound fairly manipulative on supply side, production side, or both. However, structuring business for greater efficiency and profit isn't necessarily bad in itself. For that matter, profit isn't necessarily bad in itself. And that's really the point I want to hit on.

It has long been a central thesis on the left that corporatism, capitalism, the profit motive degrade and dehumanize, that capitalism and profit are necessarily evil. Hence those apparent non sequiturs by Dines. And that's the question I want to try and address. Is capitalism evil?

Short answer: No.

Long answer: Yes.

What does capitalism do? It allocates manpower, intellect, resources in order to solve a problem. In return for solving the problem the people involved get money (another resource, an external indication of value). That's not a bad thing. It's also not a good thing. Capitalism is explicitly amoral. All it does is identify a hurdle and the resources necessary to solve it (A) and compares that to the value to be gained thereby (B). If B - A > 0, then capitalism ho! This hurdle could be the problem of finding cars that don't use fossil fuels, or it could be how to murder your inconvenient wife and dispose of the body. Entirely and explicitly amoral.

So, no, capitalism isn't necessarily evil. In short term theory. In practice, we find that it is, and exploring theory in greater depth explains why.

The Sins of Abuse
You don't need high-process theory to realize that capitalism is, far more often than not, monstrous in practice. Whether you're talking about the crude barter/slave systems of the pre-industrial world, extending back through feudalistic Europe to Imperial Rome to Ancient Egypt and beyond (in both time and space), or the early era of industrialism of the early 19th-century US, the result is quite negative. People exploit inequalities of wealth, power, and information (almost always all found in a single set of hands) to take serious advantage of others, harming them financially, emotionally, and physically. This results in explicit and implicit slavery; people seriously injured, maimed, or worked to death; entire communities suffering over generations from a degrading and dehumanizing system that values them not at all and discards them when no more can be wrung from them. The systematic effects of such are still felt in the poorest areas of the United States today, and I have no doubt the same is true and will continue to be true for centuries across the world.

The Sin of Poullution
There's an additional problem in negative externalities. In a word, pollution. Large businesses, producers, manufacturers whenever possible produce as much as they can and deal with as little waste as they can. This led for centuries to the communities surrounding various businesses suffering from the air, water, and noise pollution those businesses produced, from the chemical spill-off of metal refineries and tanneries to the choking smog of coal-powered mills, to carcinogens and toxins from modern plants. These were spewed carelessly into the environment, the cost born by those who had to live with them rather than those who made them. Why should your neighbor have to put up with your stink? Why should he die from it?

The Sins of Fraud and Perjury
Then there are acts of deliberate fraud. The toxic and addictive nature of tobacco was known as early as the 1890s, yet the tobacco industry fought long and hard, and lied, to prevent the public from knowing that; it took more than a century to bring them to heel. The DuPont corporation a decade fighting standards to control CFCs (aka, the ozone-destroyer). The Ethel Corporation and the Oil Industry spent decades lying about the effects of lead on the human body, beginning a few months after tetraethyl lead began being produced and added to gasoline3, not stopping until the Clean Air Act forced lead out of gasoline, more than half a century after it was first added. These are just three examples of corporate malfeasance. All of them in the name of profit.

Is this not enough to prove it's the industry standard? How many more do you need? Enron? Madoff? Subprime mortgages?

The Failure in Feedback
And then there's the fact that capitalism is necessarily unstable. It's a system governed by positive feedback. Any engineer will tell you that a system with positive feedback is doomed to crash, that negative feedback is the proper control mechanism. Negative feedback is like a marble at the bottom of a bowl: if you push the marble (perturb the system), then gravity will pull the marble back down (feedback opposite the perturbation). Positive feedback is like a marble on top of an upside-down bowl: if you push the marble (perturbation), then gravity will continue to pull the marble away from the top of the bowl (feedback in the same direction as perturbation). Like a microphone too close to the speakers, a system governed by positive feedback will spiral out of control until it breaks. The history of the US economy is one of boom and bust, boom and bust4.

Assuming some business manages, through luck or shrewd practice, to escape this cycle of destruction, it finds itself in the enviable position of attempting to end the cycle by destroying capitalism. The end goal of any participant in the free market is to become a monopoly and destroy the market. The end goal of competition is to destroy all competitors, end competition, and set prices not by some measure of value, but simply by what will make the monopolist the most profit. Where monopolies can't be forced into existence, oligopolies and cartels will suffice.

But Why?
I'll give you one minute to come up with ten hypothetical scenarios where a business could increase profit by behaving immorally. I'll give you an additional minute to come up with one scenario to increase profit by behaving morally. Go.

An Injection of Morality
Nowhere will you find morality in a corporate mission statement. At no point does capitalism stop and ask, "Setting profit aside, does this achieve greater human welfare?" Profit is the beginning and end of capitalism. This is, in fact, the law of the land, going back to 1919 at least when the Supreme Court held that shareholder shareholder profits must be placed above the good of the community or of the employees. By law, the best you can expect of a company is that it will be amoral. The best you can expect is that it won't be evil. As my examples showed above, that is literally the best you can expect. And you shouldn't expect it. Centuries of history should prime you to expect corporate villainy as the default. Every business will try to duck responsibilities, to force in all ways the cost of its operations onto other people, to squeeze money from the market regardless of value, to eliminate competition by any means necessary.

And that's where we come in. That's where government comes in. Our laws, our regulations, our courts, and our press5 are our defense against immoral corporate practice. They are the means by which we force morality and conscience into a system that is deliberately designed to have neither. They are the only we to prevent a monstrous tyranny, a terrible, sickening (literally) system of abuse and exploitation. It's the only way to prevent tragedies and create a modicum of justice. Even the mildest of honest history lessons will expose centuries of evil, ameliorated only by hard-won battles, in the face of well-funded and often violent opposition, instituting systems of oversight and regulation. Only government can save society from the economy.



1 - I bet his name's actually Bob.[/fatuous]


2 - I get the feeling that, as far as Dines was concerned, pornography would have been damned either way. Either they're in it for the money, which is bad because they're exploiting women for profit, or they're in it for the sex, which is bad because they're deliberately with malice aforethought exploiting women! Maybe I'm being uncharitable, though. Perhaps she'd really appreciate organic, free-trade porn, or a pornographer who enthuses "I'm just in it for the sex!"


3 - Tetraethyl lead reduces engine knock, a problem of multiple detonations in an automobile's combustion chambers. It causes damage to the engine and results in a characteristic "Ping!" noise. Interestingly, the man who discovered this, Thomas Midgely, also developed CFCs, chlorofluorocarbons, for use as a refrigerant. Fuckin' a, dude.


4 - Too make things worse, even that part of the game is rigged. The rich make money building the system, they default on their debts when the system crashes, then they gather the pieces and start over. Meanwhile the poor get poorer and are locked in a pattern of debt and ill health from which they, unlike the rich, cannot escape when the system crashes.


5 - Until the press becomes a corporate monopoly. Yay. "Liberal media" my ass.

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