Monday, February 16, 2009

Capitalism, you ain't so hot.

There was yet another discussion on Socialism an LDS doctrine at the Mo-Board (of which I am a member). I made some lengthy posts, which I'd like to modify into a blog post. My main gripe actually doesn't have much to do with being pro-Socialism, but rather anti-Capitalism. Here goes.

In the Book of Mormon, the Nephites go through what is commonly referred to as the "Pride Cycle." When the people were righteous, they had "all things common among them" every man worked "according to his strength" and they "impart[ed] of their substance... to the poor," and "they did not send away any who were naked, or that were hungry, or that were athirst, or that were sick, or that had not been nourished; and they did not set their hearts upon riches; therefore they were liberal to all." (Alma 1:26-31) When the people aren't righteous, they are described as being prideful, greedy, classist, and no longer equal with each other. (4 Nephi 1:24-26)

In the Pearl of Great Price, Zion is described as a people where they were of one mind and there were no poor among them. (Moses 7:18)

In the verses from Alma that referenced (but didn't quote), it says that the people suffered persecutions, but because they were a righteous people, they were able to maintain peace and equality. The reason being that the wealthy didn't hoard their wealth, but shared it with the others in need. Righteous people don't despise the poor, they aren't predatory in their business practices, and they don't hoard their resources even when those around them are in need. Many LDS people assume that righteous people weather rough times better because they are wealthier or don't experience trials to begin with. This, of course, is ridiculous. When rough times come, it's up to the individual and the community to get through it together. If your poor neighbour is suffering, point the finger at yourself for not helping him/her before you assume they're unrighteous.

I don't believe that monetary capital should be the most important thing (as it is in Capitalism), but rather social capital. People are important. Communities are important. Families are important. The only way to make society better is to invest in social capital.

Also, yes, I've heard Pres. Benson's talks, and I understand that he hates socialism and was a libertarian and involved in the US government quite heavily. I also know that there are numerous scriptures, words from prophets, and a whole economic system set up by early church leaders (United Order) based around community, sharing, and redistribution of wealth. Those who hate Socialism will constantly go back to Pres. Benson, but I think numerous scriptures and words from prophets over the course of a few thousand years heavily outweighs the opinions of one prophet/politician living in the Cold War era, trying to convince everyone that the LDS Church is NOT Communist. The LDS wasn't Communist, but why does the pendulum have to swing the other way? Why do we need to wholeheartedly embrace Capitalism? What did Joseph Smith do when none of the options of religion were right for him?

That being said, I don't exactly identify as a "socialist", either. Pres. Benson says that big government dis-empowers its citizens because the bigger the government the less power each individual has to make a difference. I agree to an extent, although I don't feel nearly as strongly as he does. I'm more of a "Localist", you might say. I think the emphasis of our lives and production should be based around people, families, communities, and making life better for people, not driven by the desire to produce more money, even if it means making crap that no one needs and won't even work at the detriment of de facto slave labourers, the environment, and the health and agency of the community. It boggles my mind when a person doesn't believe in big government, but they have no problem with big business. Big businesses are happy to take over the government's job and do an even crappier job at it, that's why many people refer to the IMF as a "world government in embryo." I would go further and take off the "in embryo" part.

I don't wonder why church members don't embrace socialism - I wonder why church members embrace and defend capitalism with such fervour. Why gain is considered godly and profit trumps all, even morality. For some reason, we respect the predatory business practices of the guy with the 5000 square-foot house, and not the guy who dedicates his life to building social capital in the community, because the rich guy must be "righteous" is he's supposedly being blessed with prosperity. For some reason, wealth seems to be a mark of righteousness even though prophets and the scriptures teach us that we should not seek after wealth except to build the kingdom of God. How a pool and a home theatre build the kingdom of God more than paying taxes that help feed the hungry and clothe the naked, I don't know.

For me, personally, I'm not trying to convince anyone that Socialism and the BoM go hand in hand, but rather that Capitalism and the BoM do NOT go hand in hand.

Also, none of this "Capitalism is good because free will is good" crap. That's nonsense. If you think that, you're probably one of those people who thinks that Capitalism and Democracy are inseparably tied together. Most people don't realise that a lot of countries democratically elect socialist leaders only to have them overthrown by Capitalist dictatorships (Indonesia and Chile both experienced this) and that many dictatorships that many people think are communist are actually capitalist (China). Generally speaking, the wealthy favour Capitalism and the poor to middle-class take a more liberal political stance. There are more poor to middle-class people than there are wealthy people, which is why socialist and left-leaning leaders often get elected.

In conclusions: Capitalism ain't so hot.


  1. Nice post, Heidi. Yes, Capitalism, focused as it is on self-interest, lack of restraint, and emphasizing finance, ain't so hot. It discourages morality and values (see Rand's The Virtue of Selfishness and Friedman's frequent maxim that corporations have no obligation beyond maximization of shareholder value), despite what Steven said, and encourages a narrow focus on money and on uncontrolled growth. As David Korten, economist who wrote the great books When Corporations Rule the World and The Post-Corporate World, pointed out, growth without limits or concern for others in the system is nothing more than cancer.

    I hope to write a series of posts on the subject in the future. But you've hit some of the key points right away.

    BTW, I agree with your focus on localism. I've heard some who agree that formal socialism doesn't work but who appreciate the principles call such a system "communitarianism." I like it.

  2. Derek:

    Whoa, there, Tex! ;)

    You make it sound like selfishness began in 1776, with Adam Smith and Wealth of Nations--and will end only with the elimination of capitalism--and capitalists!

    The truth is, selfishness began in the "pre-existence," with Satan's (in)famous five "I will..." statements, which effectively declared war on God and His people [See Isaiah 14:12-15].

    As the aforementioned Adam Smith said in his aforementioned book, what capitalism does is channel people's self-interest toward the general interest. If Bill Gates, for example, wants me to part with my money, he must give me something that I value more. For all of Windows' failings, it IS "user-friendly," and its quality is "good enough" to allow us to do more and better (Contrary to the Clinton Justice Department officials' accusations, Microsoft is NOT a monopoly!).

    In short, Gates' work allows us to argue about--Gates' work! ;)

    It is true that Ayn Rand wrote the book, The Virtue of Selfishness. However, she misuses the word, conflating it with self-interest. She is not the only one, though; you did it too. While, as Milton Friedman said, for most people, most of the time, they ARE synonymous, this is not always the case. If it were, our attempts at righteousness would be selfish and sinful, because it is in our self-interest. ;)

    With all due respect, David Korten is wrong (I am an economist, too!). Growth without limits is impossible. While there are "economies of scale," there are also "DIS-ECONOMIES of scale." Over time, "cheaper in bulk" is overtaken by the "Law of Diminishing Returns." When that happens, companies stop growing and start shrinking. I would recommend Ronald Coase's ground-breaking article, "The Nature of the Firm," in the November 1937 issue of Economica.

    As a word of caution, a previous attempt at "communitarianism" without markets by Pol Pot in Cambodia resulted in "The Killing Fields."

  3. Hold on, Turbo. I never suggested that selfishness was born with Adam Smith (whose theories to which much of modern capitalism, particularly the financial aspects and the emphasis on the corporation, bear little resemblance). As you said, there has always been selfishness. However, capitalist theory rationalizes and encourages selfishness. I didn't "misuse" the word; I simply called the spade a spade. At least Rand had the courage to be honest about it. For all the use of the word "self-interest," the advocates of modern capitalist theory make little distinction, and are perfectly content for people to make economic decisions which help themselves at the expense of others. Lay off employees today so you can earn a bonus or increase shareholder value short-term? Great! Move the factory where wages are minimal and labor standards are low? Wonderful! Get more immediate resources with mountaintop removal? Fantastic! You can suck more money out of people by enticing them with pornography in your hotels? Get it done! Never mind the impact on the local communities, the environment, or on society at large. Cost externalization is the name of the game. Just do what's good for numero uno, and forget the rest. That's modern capitalist theory. Conventional economists can pontificate and rationalize all they want, but that's the bottom line.

    You miss the point on Korten. He understands that growth without limits is impossible in the real world. He also correctly points out that the corporate structure demands infinite and ever escalating expansion. Slow down, and you're dead on the corporate scene.

    Interesting that you mention Bill Gates, who, like all good capitalists, didn't just try to fill needs--he did everything he could to manipulate the market and conditions to make him more successful. He abused his overwhelming market dominance in the OS market to deliberately obstruct Real's ability to compete (ie, intentionally making Windoze as incompatible as possible with Real software). He bullied computer vendors who were considering Linux. He wasn't interested in making the best possible product, but in putting up barriers to competitors. Great for Micro$oft, not so good for public choice and competition. But hey, all's fair in capitalism.

    If the free market isn't subject to moral restraints, then it is corrosive. Because modern capitalist theory, with its worship of "self interest," rejects moral restraint, it is idolatry.

  4. Also, there really ridiculous policies when it comes to agriculture. An African cotton farmer can't sell his cotton locally because American cotton is being subsidised so heavily that the price is lower, even though it actually costs more to have it processed and shipped to somewhere distant.

    Correction, he's making some people better off. The trick of Capitalism is to get the people with money to like you by screwing someone else over. If it's easier to thwart your competition than to actually innovate and stay ahead, that's what they'll do. It's not about progress or improvement, it's just about money. If you take advantage of the poor by exploiting them for labour, it helps the wealthy by making things cost less for them.

    Morals aside, the value of an economic system should be measured by how well is serves the human community. The economy exists to serve us, not vice versa. An economic system need not have “morals”, but the proof is in the pudding. Is the human race better off? Could we be doing things better?

    Economic systems should take greed into account – not cater to it.

    As for being a localist, no one's purely localist, just like no one's purely Capitalist or Socialist. There may not be a term for my perfect economic system, but there's no reason why we can't take elements of what we have and try to improve upon it.

    If money were a more accurate indicator of cost (labour cost, use of resources, cost to human health, environmental cost), economies would naturally tend toward being local. Shipping items around uses resources and is not time-effective. If you need something that can't be produced locally, then the extra cost is worth it.

    Also, it's funny you should mention Europe and North America, as they obtained their wealth by being more localist. They had a lot of government intervention and policy to ensure that people would buy local, including heavy tariffs on imported items and ad campaigns aimed at making people feel unpatriotic if they bought imported goods. Once they got sufficiently wealthy, the name of the game became going out and finding poorer nations to exploit. It's like a pyramid scheme and the underdeveloped nations are at the bottom of the pyramid. The people on top are inviting everyone to join their pyramid because things are so great for them at the top, but, of course, that involves a lot of people on the bottom. Pyramid schemes don't allow people to have "all things in common."

    Countries like Indonesia and Chile tried to instate policies similar to what the US and Britain had back in the day – tariffs, price control, encouraging people to buy local – and it worked great until the IMF and Milton Friedman decided they didn't like that because it made them harder to take advantage of. A few thousand dead bodies later, they were “happily” capitalist. Let's face it, Chile was doing quite well until the Chicago Boys screwed it up for them. I mean, the rich Chileans are richer, but everyone else faced a drastic drop in quality of life.

    One last thought – wouldn't it be nice if the workers owned the means of production? Management always makes the most, even though they're the least productive. That doesn't seem right to me.

  5. No, I'm not saying economics is all about money. Capitalism is all about money. It's money-ism. My argument is that money is a poor indicator of value. The price of any given item rarely has to do with it's actual cost. For instance, you can get something made in a sweatshop for cheaper, but only because the labourer is absorbing much of the price and paying for it by not receiving a living wage. The cost of a sweatshop-made item is actually higher because someone's life is being devalued and it has to be shipped over great distances, but the price is lower because a wealthy American has the ability to force labourers to absorb some of that cost. I do not subscribe to the notion that it's okay to take advantage of someone just because they have no other options. If you find someone weak and struggling on the street, you help them, not rough them up and take their money.

    You could become a citizen of another country if you really wanted to. That aside, I think you're underestimating the power that corporations have over people. Consider someone who lives in Indonesia, where the only employer is the Nike sweatshop (or the pimp from the city). If you insist on fair treatment, they can deprive you of your livelihood. You play by their rules or you don't play at all! If you don't like 24 hour swifts, then tough! North Americans have it pretty good, but what about everyone else?

    Also, if Bill Gates wanted to ruin your life, he's sufficiently powerful that he probably could. As far as the IRS killing you for not paying taxes – that would not happen because other citizens would see that that isn't fair, and there would be a complete uproar.

    My worry about the government is that they answer to corporations too much. There was an example of this a while back, when the Canadian government wanted to change the Food Guide to recommend less meat consumption. This was based on scientific evidence and had the health of the community in mind, but the meat industry caused an uproar and made them change it back.