My Tirade Against Unbridled Capitalism

Ah, the time has finally come to lay low one of the few unquestioned Gods in political science and academia in general, the almost universal consensus that capitalism is the best economic system, maybe I should put "best" in quotes given "best" can be measured in many ways all depending upon what you value whether that is economic equality, unrestricited competition etc.

Now I personally do not fall to the folly of capitalist or the equally foolish communist idealism, I have a very realistic [realpolitik] and pragmatic approach to all things concerning the corporeal world and especially with regards to the affects such forces have upon the preservation of distinct European ethnocultures, something I am intimately involved and interested in. I am not constrained by the theoretical or the abstract, these are things which I believe should be reserved only for leisure time when you are satisfied with your achievements in the reality of your existence; escaping this world for the world of theory and philosophy I think is a cowardly approach to living, applying idealistic principles to an imaginary world that simply cannot and does not exist. Leave it to the dreamers, I'm a worker and a creator.

I've gotten into debates with capitalist and communist ilk alike over the impractical application of their theoretical conclusions in the real world and have come to several eye-opening conclusions but today, I will only cover my criticism of unbridled capitalism and free market liberal economics as it seems that it is the order of the day and perhaps the decade. You can't weather a single day without hearing about the impending storm of a depression, the anxiety and tension is tangible enough to cut like a rope. Where is all their wonderful theory now? It seems like the economists of several nations haven't the slightest clue as to what to do next! You see Economics ministers resigning right and left over failing to both predict the recession and assist in their nation's recovery from it. Just from the one's that I know of, the German and Japanesen economic ministers have both resigned albeit one was due to public embarrassment - I can't really blame him for getting drunk, after all, he hasn't the slightest clue in the world of what he is doing! See, this is the insanity behind reducing all life and all interactions, both social and commercial between human beings to a deceptively simplistic delusion whereby we can reduce all things to a convenient equation of supply and demand and magically everything else will solve itself it. It is precisely this fallacy that pompous and pretentious ideologues who dogmatically declare supply and demand to be an entity and a law of an almost God-like status that has led us to our present predicament.

Essential to the operating logic behind a market is the broad assumption that consumers themselves are entirely rational and will follow the consumer behaviour that is yields the greatest value and utility for them at the best cost [market equilibrium, where supply meets demand]. Therefore, it is taken as a given that consumers will appropriately and accordingly respond to fluctuations in supply and demand using their rationality. For example, if you put things on sale, naturally people will rationally realize that it is beneficial for them to go out and buy that product on sale.

However, one can only make the argument that we are consciously rational, but it is something altogether different to prove such a position. In light of our increasing scientific understanding behind human nature and the evolutionary processes that have largely shaped us as we are, surely they have proven that we have access to mental and rational faculties unmatched by any other creature and that this sets us apart from most animals, however these studies have also shown that we are nonetheless quintessentially biological beings [animals] and still subject to the evolutionary pressures of human instinct and our "animal side," the portion of our nature that often inexplicably influences us to certain unexplainable and irrational behaviour, a process performed entirely at the sub-conscious and irrational level of our mind and natures. Therefore, to say that we are unequivocally rational and always aware of the decisions that we make is an idealistic and unfounded overgeneralization of the human condition that is especially inconsiderate of our recent insights into human nature and our genes. Now you understand why I place such importance upon articles exposing our human nature via our genetic code.

Furthermore, I'd say problems with our rationality are even further exacerbated when we examine people as a social and communal group [what I believe to be our natural condition, not the abstract and atomized individual] in that our rationality is often hindered by the phenomenon of "group think" which is simply an expression of our inherent tribal nature. The desire to sacrifice personal and individual convictions for the sake of a sense of belonging and security within a group, otherwise known as sacrificing for the common good. It is not always a negative our individual aspirations for communal goals, but it is also not always positive; in any case, this tribal sense of belonging being a basic component of our human nature [our irrational subsconscious] hinders our rationality more often than not because we're swept up in emotion, the joys of elation or the pain of suffering a traumatic event, in either way it is a means of propelling yourself towards action that will save the group and hence perpetuate the continuation of your genes or the genes of your group [i.e. related members]. That is after all what human nature is about.

Now only does the collective constrain what is deemed as being "rational," but the two in-fact might even have entirely different conceptions of what is rational, creating this dichotomy between individual rationality and collective rationality. Imagine you and your family or community live in a cave and they're about to be attacked by a rival faction that is far more powerful than your own. You must devise a way to protect your community and ideally yourself at the same time. Now, at first, individual rationality would simply compel you to pack your things and run away with your immediate family, damn the rest all to their fates which is collectively irrational. However, this is often easier said than done because we have a natural compulsion towards being sympathetic to members of our community that we connect with; we have a subconscious connection and duty to protect the community which often encourages us to stop thinking solely of ourselves [individual rationality] and places the community on the pedestal [collective rationality]. In such a scenario, we may collectively rationalize that one person should stay behind and collapse the tunnel on themselves so that the rival faction cannot hurt the rest of the community, a choice which as I said is collectively rational but individually irrational because you are sacrificing your life for the lives of others. This constant pull between these two often mutually exclusive forces also creates problems in considering people as being entirely rational beings because in what sense are you applying the word, individually or as a collective?

Therefore we find that at both the individual and societal levels that there are certain subconscious and irrational processes that propel us towards making irrational decisions or perceptions of the wider world based on our human instinct.

Hence, the way I would liken the human condition would be with the self-made phrase: "We are only half rational half of the time." The remainder of us is composed of instinct, human nature, feelings, emotions and inexplicable desires. Therefore, by extension, any system such as capitalism [and most of liberal thought] or communism that is based entirely on the proposition and assumption that humanity is inherently rational and logical as a whole can only be half right, half of the time because it doesn't take into consideration the unexplainable and unquantifiable aspects of our humanity. Due to this imperfection and error between theory/the fundamental basis of market economics and applying it practically to the real world, I believe that there is a certain sense of justification in moderate regulation of the market economy only in so much as it accounts for the influence that our human nature plays in determining the consumer decisions that we make. Regulations do not "distort" the market because it is already distorted by not adhering to the realities of the human condition. I believe it to be beneficial for these regulations to rebalance the market so that it recognizes the role our humanity plays in the decisions that we make and that certain regulations can be beneficial for the nation if aimed at achieving a certain degree of dissemination and acceptance of specific morals and values conducive to the preservation of our unique ethnocultures and societies. Sadly, market economics as we know it today places little value on the importance of nations and identifying with a group because in their endless list of cost-benefit analyses, the only conclusion that they can come up with is that money is law, God, life and everything else. Nothing is beyond a cost-benefit analysis for them, nothing is beyond the quantifiable and yet this is precisely the fallacy behind free market economics and countless other "rationalistic" theories, they do not take into consideration the unquantifiablility of our human nature. There is no cost you can place on that, it is priceless, it is who we are!

Or as the famous saying goes, capitalists are like cynics because they both know the price of everything and the value of nothing.

Also, I think that capitalism especially with regards to its absolute devotion to free trade suffers from a paradox. I would the argument that free trade is actually inimical to what most people would consider as the basis of capitalism, small businesses. This paradox will be quite a challenge to explain because everyone seems to have been brainwashed with free trade orthodoxy that individual thought seems to be at a premium due to its rarity these days.

As we've discussed before, the foundations of capitalism are based upon the rationality of the consumer and a fanatical support for unregulated competition. However, this runs into a problem when we begin examining the effects that free trade has upon competition and the requirements that are enforced onto companies if they hope to be internationally and economically successful. Frankly put, capitalism theoretically idealizes maximum competition and hence desires to have as many small businesses as possible whereas free trade has a realistic inclination towards large, internationally competitive companies that create an international oligarchy. It's quite impossible to reconcile the two because more often than not, small businesses are not able to withstand the competitive pressures from international companies simply because of the concept of economies of scale which makes large companies inherently more competitive as a whole than small companies. It's very similar to the old saying, the rich [big in this case] get richer [bigger] while the poor [small businesses] get poorer [smaller, eventually bankruptcy].

If you want to know why, you have to contrast the competitive environments between a domestic economy and an international economy. When a small company and a large company compete domestically, the competitive differential between the two is rather small because they are both compelled to operate in a labour market with where they pay their employees generally the same, they're both subject to the same governmental regulations, they both have to attract the same market/population etc. Even though the larger company is more competitive due to their size [they can manufacture or sell services and goods at less of a cost on their overall operation], the differences are not as extreme as in the free market scenario and can be largely offset if the smaller company exhibits a more entrepreneurial and innovative attitude that might attract consumers.

When we move to the international economy, we have to recognize that not all companies can equally take advantage of expanded opportunities in labour force, consumer market and productive resources. This is what inevitably leads to the immense disparity in competititiveness between small companies and larger companies within the free trade system that dominates today. Naturally, larger companies will be more capable at exploiting the new opportunities by utilizing new productive resources at a cheaper cost than in their home country, by outsourcing their labour force to reduce operating costs and by expanding their market base, all of which works towards increasing the companies' profit which can be reinvested to make them even more competitive and so on. Where does the small business stand in this flurry of expansion? Stuck at home and condemned to the same strangling regulations and market forces as they were before with little to no room left for growth because of the influx of large foreign companies and also because traditional competitors have been able to exploit the advantages of an international economy. The small business is left with few choices and more often than not ultimately ends up going bankrupt, sure they might withstand a few years or maybe even a decade but their fate is already sealed. All the evidence you need is right before you especially for anyone who's been around for a few decades and lived in a small town, they are likely to have seen their fair share of local shops and domestic stores gone out of business due to giants like Walmart and others. A family owned business simply cannot compete against the likes of Walmart and their insanely low prices and slave labour commodities.

Therefore, we come to the inevitable conclusion that even though capitalism theoretically desires perfect competition via as many small businesses as possible, what actually happens through free trade is that it limits the number of viable businesses out there and it also sets up competitive barriers [created by the market and companies via competition!] that restricts the number and growth of small businesses. All of this essentially means that the economic market essentially becomes stratified with a few enormous competitive companies at the top leaving little room or chance for smaller companies to sprout up and actually challenge them. All of this goes against capitalist orthodoxy and thus the paradox is born where capitalism wants small businesses and lots of competition yet can't have them because competition itself and unhindered free trade inherently narrows down the field of competitors resulting in less than perfect competition. Hopefully this made sense to someone.

Also, I have a slight problem with the notion of comparative advantages; the concept that each nation has a natural advantage over all other nations in producing a specific product. For example, say we have Portugal and the UK both manufacturing wine and fleece and trading a little bit of it to make up for deficits in supply etc. However, according to comparative advantage, both nations should concentrate all of their ability in supplying the world with the service or good that they are able to produce more competitively and efficiently than anyone else and then trade for the rest. Therefore, the UK would create only fleece and Portugal would make only wine because that is what they're best at doing and then trade with one another if they need the other good.

In theory, like the rest of capitalism, it all sounds great and fun, however in reality, things are never that simple. Firstly, this notion assumes that all nations have a certain product that they can offer more competitively than anyone else but that simply is not the case. Not every nation has a certain expertise in supplying a single or a few products for the international market; what can sub-Saharan Africa offer to the rest of the world other than sand? I suppose they have some oil, but who would spend money in creating infrastructure to exploit the oil there when they can get it all much cheaper from the Middle East countries. Also, should we simply be content to begin labeling certain nations as coal producer, fleece makers, bankers, gold miners, electricity producers etc. and what about more complex services such as marketing or advertising, I'd scarcely think that a certain nation has a natural advantage over another. In economies who lack diversity like these - and also like Britain which is set to suffer the most of all developed nations because they've allowed their manufacturing base to be hollowed out leaving them heavily dependent upon their financial sector - they will be increasingly susceptible to price fluctuations [especially for raw materials] that determine whether their economy is growing or receding and I think citizens deserve better than the uncertainty that this creates over their economic futures and the future of their family and children. That's pretty much all I have to say about comparative advantage; I think in certain instances using subsidies to prop specific industries that are critical in ensuring that the national economy is diverse and overall more competitive in many fields than it would otherwise be without government support is crucial especially in times when we face recession such as the one that we are in because having a diversity of industries often helps make our economies more resilient to other economic shocks from around the world.

That's all for today.