Imagine that you go to play roulette in a casino, and the house wins unusually frequently. For example, every time. So you go the the caisse and say, “have you noticed that…?”
You go back over to watch a few more rounds and the house loses the next three rolls. The pit boss is watching you closely. After a while, he shrugs and the house goes back to winning every time, again. As you walk toward the pit boss, he raises a finger and 4 large men grab you, drag you out into an alley, and expertly kidney-punch you for a while. During that process, you realize that there’s a meta-level: not only does the house win an unusual number of throws, but the entire regulatory structure is rigged so the house wins. When you regain consciousness in the hospital, you call the gaming commission and tell them what happened and a voice says “stay on the line, please” and a sleepy-eyed guy wearing a raincoat lets himself apologetically into the room and shows you the Stryker saw he has in his briefcase. That’s when you realize that the house has been ahead of everyone, for a very long time, and the entire system is nothing but “the house wins.” It’s rigged at every level.
Here is an idea to remember: we would expect the system to be constructed in such a way that it cannot be reformed without destroying it; that’s another aspect of how it’s rigged – that’s the “too big to fail” gambit. And here’s how you can prove it to yourself:
- In capitalist societies, the wealthy will always be a minority of the population. (in the US, 1% hold 38% of the wealth)
- In a democracy, 1% cannot legitimately control the political process – the other 99% would just vote over them.
- Capitalism is anti-democratic.
- If it’s a capitalist society, the democratic process (such as there is) will be rigged at every level.
Please convince me I’m wrong.
Obviously, the whole balance of disempowerment is going to be more complicated than I made it out to be. There’s the problem of money influence in politics; perhaps the democracy isn’t entirely fake, it’s just corrupted by money to the point where it makes no difference. But in that situation I would expect the system to be rigged at every level – just in case the people rise up and unify, it’s good to have a hedge in place to make sure that doesn’t happen. Besides, there’s always a military coup as an option waiting in the wings.
This is one of those things like debating global warming: you’re not arguing that global warming is real because you want it to be real. In fact, you’d be thrilled if someone pulled out a destroying argument that convinces you that the situation is not what you think it is.
The first version of my meme was “What if I told you that you’re going to get ‘wealth redistribution’ no matter which pill you take?”
Well, I wouldn’t say that you’re wrong as such, but I think you’re over-simplifying things. “The wealthy” aren’t a monolith, for one thing – they’re all looking to get one over on each other, there’s a lot of factionalism, and one of the classic ways to enhance your power and prestige is by manipulating “the system” to advantage yourself and your friends, and to disadvantage your rivals – and one of the classic ways to do that is to appeal to “the people”. “The system” isn’t a monolith either…
In short, it’s complicated, and history shows that there are a pretty wide range of possible outcomes, none of which are truly stable. The US is currently on a swing towards oligarchy, but that doesn’t mean there are no other possibilities, and the pendulum won’t remain at one extreme for ever.
Sunday Afternoon says
I don’t think this is restricted to just capitalist societies. My understanding/usage of “wealth” implies having significantly more means than most, so your first point reduces to a tautology/definition. I don’t think this has much bearing on the rest of your argument which I’m not trying to refute.
“It comes from a very ancient democracy, you see…”
“You mean, it comes from a world of lizards?”
“No,” said Ford, who by this time was a little more rational and coherent than he had been, having finally had the coffee forced down him, “nothing so simple. Nothing anything like so straightforward. On its world, the people are people. The leaders are lizards. The people hate the lizards and the lizards role the people.”
“Odd,” said Arthur, “I thought you said it was a democracy.”
“I did,” said Ford. “It is.”
“So,” said Arthur, hoping he wasn’t sounding ridiculously obtuse, “why don’t people get rid of the lizards?”
“It honestly doesn’t occur to them,” said Ford. “They’ve all got the vote, so they all pretty much assume that the government they’ve voted in more or less approximates to the government they want.”
“You mean they actually vote for the lizards?”
“Oh yes,” said Ford with a shrug, “of course.”
“But,” said Arthur, going for the big one again, “why?”
“Because if they didn’t vote for a lizard,” said Ford, “the wrong lizard might get in. Got any gin?”
— Douglas Adams, of course.
Ieva Skrebele says
I think you are right.
It’s the exact opposite for me. I want to believe that the economic and political system under which we are living is rigged and unfair. If it wasn’t, I would have to answer an unpleasant question—how comes that some groups of people are poor and live in misery? How comes that, for example, black people are more likely to be poor, employed in shitty jobs, and unable to obtain basic necessities like healthcare? The capitalist’s answer to this question would be that black people are lazy, lack ambition, and are naturally born with a lower IQ. I don’t want to believe this. I’m much happier believing that black people are poor, because we live in a rigged system.
By the way, I come from a pretty poor family. If I believed that our economic system is fair, I’d have to admit that my family members deserved to live in poverty, that they were lazy, didn’t want to work hard, were stupid, etc. excuses. And that’s fucking wrong—we didn’t deserve the shitty life we had.
I know that somebody who was born in a wealthy family would have a vested interest in believing that the world is fair and they truly deserved all those luxuries they had.
Raucous Indignation says
“Too big to fail” is just propaganda. They can fail.
OK, I’ll give it a shot to see if I can defend capitalism.
First of all, I want to respond to @4. Of COURSE capitalism isn’t fair. You’re quite right that anyone who tells you it is, is selling you a bill of goods. If we had free college tuition for all, taxed inheritance at 100%, and got rid of racism, then we might be able to talk about fairness, but as it is it could hardly be more unfair. A defense of capitalism can’t have anything to do with fairness.
I think the essence of such a defense needs to be the “rising tide raises all boats” argument. The fact is, no matter how poor you are in today’s society, if you’ve got access to things like air conditioning, heating, refrigeration, and packaged food, you’re doing better than even the wealthiest were two hundred years ago. I’ll leave the bottom quintile out for now, but the second quintile — those in the 20-40% range — have access to luxuries that would make any pharaoh weep with envy. I believe that capitalism gets a fair amount of credit for that.
Marcus, I think that’s the answer to your point #2. 1% can control the political process by saying, “Hey, if you support this status quo, then sure I’ll get a Rolls Royce, but you’ll get a Yugo!” And since the alternative is that I scrape along without any car at all, I may decide to go along with that system — especially since I know that revolutions tend to be better at destroying wealth than fairly redistributing it (see Animal Farm).
In your analogy — it isn’t that I’m always losing at the casino. I win a pittance every day, which keeps me coming back instead of burning down the casino, even though it’s raking in a huge amount. Because unlike gambling, capitalism isn’t a zero-sum game.
My point is, you say that the system is rigged, by which I take it you mean that the people at the bottom — and again, I’m thinking of that second quintile, not the homeless but the working poor — are being suckered into supporting a system that is worse for them than some other hypothetical system would be. I disagree — capitalism generates enough trickle-down benefits that these people are better off than they would be under most other systems in absolute terms. Perhaps not in relative terms, though — I’m going to feel poorer in comparison to the Koch brothers than I would compared to the Earl of Sussex 400 years ago in a pre-capitalist society.
Now, I do think that capitalism has some pretty serious drawbacks — just not the ones you say. Maybe I’ll address those in another post.
OK, the three biggest problems with capitalism:
1) It does a lousy job with the Problem of the Commons. Unless there is a government strong enough to punish polluters, the environment will get wrecked. This is especially a problem in our current climate emergency: we will need a strong, indeed (if France is any example) almost dictatorial government to decarbonize ourselves and save our species.
2) Wealth as an incentive is necessary for capitalism to work, but ridiculous wealth disparities are not. Like most Americans, I don’t mind having millionaires and multi-millionaires around, but the multi-billionaires are ridiculous. We should tax those people back to the ground.
3) This is more of a long-term problem, but capitalism is based around the assumption that there will always be a demand for labor. Robots are going to change that. In 20-40 years, when robots can do most of the jobs that our labor force does now, that’s when the whole system will come crashing down.
Capitalism, in and of itself, as a mechanism, isn’t bad. If it can be regulated to distribute profits more evenly, to eliminate the its ability to rewrite the rules, to primarily make profits from competition in providing goods and services, and increase its profits by producing better good and services at lower prices, and do it all without polluting the environment or hurting the workers or consumers capitalism can be a very good thing.
Of course, running a business in such a well regulated environment is tough. Businessmen are not tough. They like easy. They like easy and predictable profits and they are lazy. The thing that scares them the most is competition. Real, no holds barred, competition is gladiator combat where all competitors get hurt and the only beneficiary is the consumer. Businesses will bend over backward to avoid real competition. Mostly they make noises at competition while they carefully divide up markets, niches, and segments to avoid any but the most inconsequential contests.
Much of what is assumed to be competition is not because branding by a single, or small number of, corporations, typically cross invested in each other, is often used to simulate competition. Walk down the toothpaste isle in your big-box store and wonder at he many brands. Read the fine print on the box and you find out that Colgate-Polmolive and Proctor and Gamble manufacture almost all of them. Seeming smaller brands like Tom’s of Maine and Bert’s Bees are made by Colgate and Chlorox respectively. Corporations themselves, or through holding institutional investors, typically invest across the line so that ostensibly separate corporations are, are in effect, firmly attached and unwilling to engage in bloody competition. This also makes profits much more predictable. Cowards all, businessmen love predictability.
There is also the fact that business, as with most other systems, can be optimized to spread or focus profits or liabilities on segments of the system. Up until 1972 corporate profits tended to include labor. Before that, if corporate profits went up labor received a raise or benefit increase. After that it has remained mostly flat. Corporate profits have soared and labor doesn’t get a cut of the profits. The profits are reserved for investors and executive management. This wasn’t a random act or anything other than by design.
A single adult working an average job with benefits in the 70s could raise a family working just 40 hours a week. By 74 you needed overtime just to cover the bills. By 76 wives had to go to work. In the 80 her part-time job wouldn’t get it. Now two adults working 40+ hours barely scrape by and live in fear of even small calamities. A recent study observed that something like 70% of people couldn’t come up with $500 without taking out a loan or otherwise borrowing it.
The end result is that profits are booming, the 1% are doing great. But he vast majority of people are stressed out. When the game is rigged it takes the zest out of playing. People are withdrawing from the games. A joke from the old Soviet system was that ‘We pretend to work and they pretend to pay us’. Who knew it could happen here?
I buy nothing I don’t absolutely require. I live a simple, frugal, life. I drive by hundreds of restaurants and businesses I have never visited. Hundreds have opened and closed with scarcely a glance. I haven’t been to a movie in years. A DVD from the local library or free on-line works for me. When I buy I often buy second-hand. Most of my clothes come from Goodwill. I cobble together by own computers.
I’m old enough to remember when things were different and you could hear opportunity knocking. It isn’t supposed to work this way. A country where the vast majority are miserable, a thin section is doing okay, 1% are filthy rich, and a slim .01% live like kings is not a recipe for stability.