If government tries to initiate any kind of regulatory steps – an environmental law, for example, or regulations on the freedom of banks to invest depositors’ money in risky ventures, or taxes levied on profits – these will be met with cries against government powers, as they are seen to defy the primary freedoms and drives of the system.
Another definition of a capitalist system comes from Yale University scholar Immanuel Wallerstein. In his book World-Systems Analysis, he cuts to the chase: “We are in a capitalist system only when the system gives priority to the endless accumulation of capital... Endless accumulation is a quite simple concept: it means that people and firms are accumulating capital in order to accumulate still more capital, a process that is continual and endless.”
That’s the crux of the matter, I think: accumulating capital in order to accumulate still more capital... continual and endless. Or perhaps we should turn to the words of film director Oliver Stone: “Money never sleeps.”
Large national and global corporations – especially those whose stock is publicly traded – are obliged to seek constant growth, constant profit expansion and the absolute primacy of short-term self-interest, no matter the social, political or environmental contexts or effects. Making profits for shareholders is the primary, if not the only, legal and practical obligation of corporate structure. If they do not succeed in that, businesses fail.
On the other hand, small-market local businesses have the option to operate in far different ways. Private, small-scale, locally owned and oriented businesses that operate in single markets – especially those that are not listed by stock markets – are usually more directly involved in community life; their customers may also be personal friends or neighbours. Such businesses can set priorities and retain options that largescale capitalist enterprises cannot. For example, privately owned, small-market businesses can opt out of any legal imperatives to continuously expand; nor do they have to pay dividends to anonymous or dominant shareholders. This is also true of family or community-based businesses, as well as worker-owned and operated businesses, co-ops, and ‘not-for-profit’ corporations of various kinds.
There are many international variations on the system. For example, there is considerable diversity of ‘state capitalist’ expression in China, Russia, Saudi Arabia, Japan, India, Vietnam, Venezuela and other places where countries permit capitalist enterprises to operate for private profit and to compete within domestic and international markets. But they permit this only within certain predefined spheres of activity, and not others, and with a high degree of central planning, regulation and control. In most of those cases, the state continues to operate the most crucial industries, such as energy, transportation, banking, education, security and others. Some of these countries describe themselves as socialist; others don’t.
The financial crisis is the environmental crisis; we can’t solve the former until we star t solving the latter
Small enterprises will usually continue to seek profits, i.e. the excess of income over expenses. But their smaller-scale and communityembedded ownership allows them at least the possibility to operate from entirely different hierarchies of value than their megacousins operating nationally or globally. They can more easily avoid the intrinsic pitfalls that derive from serving the hungers of large-scale, growth-oriented, stock
Another set of variations on the theme are the mixed economies of Europe, especially northern Europe, where capitalism operates freely in most economic domains, but within a context of considerable state regulation, higher taxes, and the extensive provision by governments of free or very low-cost social services – lifetime healthcare, education, transportation, childcare, elder-care, guaranteed incomes, and assured worker benefits such as vacations, maternity leave, etc. Europeans call this ‘social democracy’. Republicans in the United States call it ‘socialism’.
Then there is the crucial matter of scale. Most economists these days, the media at large and the general public do not make clear distinctions between large-scale domestic or global capitalism versus local, small-market capitalism. The former operates in diverse, far-flung markets and regions, with extensive infrastructures, gathering resources or engaging in production and distribution, wherever on Earth they can do so profitably, especially after the boost provided by corporate globalisation after World War II. Or else they franchise their activities broadly beyond their initial community.
market-driven enterprises.
This is not to say that smaller-scale businesses always behave morally or that they necessarily place the interests of community or Nature ahead of personal gain, but the smaller and more local the scale of the operation, the greater the opportunity for more pro-social, pro-community and proenvironmental values, and an acceptance of limits to growth.
A family-run store, or a restaurant, or a local service business – even when it seeks a profit – is a very different entity from a national or global resource company or bank or manufacturer or hedge fund. They are structurally and functionally different from large-scale or global capitalism, with mostly different motivations and drives – not really even cousins.
They should not both be called ‘capitalist’. I think the word ‘capitalism’ should not be used to cover nearly the territory it now does. If local entrepreneurs were the only ‘capitalists’ in the world, I would never have thought about this book. They are not the problem.
This article is an edited extract from The Capitalism Papers: Fatal Flaws of an Obsolete System by Jerry Mander, published by Counterpoint, ISBN: 978 1582437170.
Issue 275
Resurgence & Ecologist
45