The Problem Isn't That People Are Greedy—It's That They're Capitalist

Capitalism’s ethos of “grow or die” comes at our expense.

Hadas Thier

Chief Executive Officer of Amazon Jeff Bezos (L) and his girlfriend Lauren Sanchez pose for a picture during their visit at the Taj Mahal in Agra on January 21, 2020 PAWAN SHARMA/AFP via Getty Images

The fol­low­ing is an excerpt from A People’s Guide to Cap­i­tal­ism: An Intro­duc­tion to Marx­ist Eco­nom­ics (Hay­mar­ket Books, August 2020).

Com­pe­ti­tion is the beat­ing heart of cap­i­tal­ism. Mar­ket com­pe­ti­tion acts as a dis­ci­pling force, which com­pels cap­i­tal­ists to con­stant­ly accu­mu­late”: to trans­form prof­its into fur­ther investments.

It isn’t the case that each cap­i­tal­ist wants to make a greater prof­it than his neigh­bor so that he’ll feel him­self a big­ger man (though it’s true that most cap­i­tal­ists are men). Nor is the dri­ve for prof­it dri­ven by his insa­tiable thirst for more lux­u­ries. Rather, he des­per­ate­ly needs to accu­mu­late more cap­i­tal in order to get hold of the lat­est, most effi­cient, labor­sav­ing automa­tion. The big­ger the prof­it of an indi­vid­ual cap­i­tal­ist, the more quick­ly he’ll be able to invest in these tech­nolo­gies, ahead of his com­peti­tors. In the words of Dell Com­put­ers founder and CEO, Michael Dell, cor­po­ra­tions must grow or die.”

As Friedrich Engels explained:

We have seen that the per­fectibil­i­ty of mod­ern machin­ery, devel­oped to the high­est degree, becomes trans­formed by means of the anar­chy of pro­duc­tion in soci­ety into a com­pul­so­ry law for the indi­vid­ual indus­tri­al cap­i­tal­ist con­stant­ly to improve his machin­ery, con­stant­ly to increase its pro­duc­tive pow­er. The bare fac­tu­al pos­si­bil­i­ty of extend­ing his sphere of pro­duc­tion, becomes trans­formed, for him, into a sim­i­lar com­pul­so­ry law. The enor­mous expan­sive force of mod­ern indus­try, in com­par­i­son with which that of gas­es is ver­i­ta­ble child’s play, appears now before our eyes as a qual­i­ta­tive and quan­ti­ta­tive need to expand which laughs at all resistance.

In the auto indus­try, for instance, the aver­age time between redesigns of new mod­els is five years. Auto­mo­bile tech­nol­o­gy for elec­tric motors, mul­ti­speed auto­mat­ic trans­mis­sions, bat­tery pow­er, and engine pow­er is con­tin­u­al­ly updat­ed to pro­vide more car for your mon­ey.” If a car com­pa­ny comes out with a new vehi­cle that does not sig­nif­i­cant­ly improve upon old­er mod­els, it will spend those years between redesigns los­ing mar­ket share until it can pro­duce a new model.

Marx, there­fore, made the point that it is not enough to gen­er­ate prof­it; it must be rein­vest­ed. The part of prof­it that is con­sumed by cap­i­tal­ists them­selves is rev­enue, while the part that is employed as cap­i­tal is accu­mu­lat­ed. If boss­es mere­ly spent their prof­its on lux­u­ries, pro­duc­tion would not expand, and cap­i­tal­ists would not have the means to inno­vate. “[W]hat does this sur­plus prod­uct [prof­it] con­sist of?” asked Marx: Only of things des­tined to sat­is­fy the needs and desires of the cap­i­tal­ist class, things which con­se­quent­ly enter into the con­sump­tion fund of the cap­i­tal­ists? If that were all, the cup of sur­plus val­ue would be drained to the very dregs, and noth­ing but sim­ple repro­duc­tion would ever take place.”

Of course, the rul­ing class does spend an exor­bi­tant amount of mon­ey on them­selves. Mil­lions of dol­lars are poured into man­sions, yachts, par­ties, watch­es, art, and all man­ner of sundry lux­u­ries. Ven­ture cap­i­tal­ist Marc Bell recent­ly put his Boca Raton man­sion up for sale for near­ly $25 mil­lion, so he could move into larg­er digs in Mia­mi. Along with a nat­ur­al” swim­ming pool that fea­tures water­falls over sculpt­ed stone, a spa and a bas­ket­ball court on the property’s 1.6 acres, his man­sion also includes a Star Trek” home the­atre, which repli­cates the main bridge of the Star­ship Enter­prise, com­plete with prop­er swoosh­ing” sounds every time the doors open or close.

As a 2018 Oxfam report revealed, the rich­est forty-two peo­ple own the same com­bined wealth as the world’s poor­est 3.7 bil­lion. In the US, the wealth of the three rich­est peo­ple equals that of the bot­tom half of the pop­u­la­tion. This gap grows by the day. In the eco­nom­ic cri­sis emerg­ing along­side the COVID-19 pan­dem­ic, the rich are mak­ing a killing. Accord­ing to the Insti­tute for Pol­i­cy Stud­ies:

Between March 18 and April 10, 2020, over 22 mil­lion peo­ple lost their jobs as the unem­ploy­ment rate surged toward 15 per­cent. Over the same three weeks, U.S. bil­lion­aire wealth increased by $282 bil­lion, an almost 10 per­cent gain.

Yet despite their pre­pos­ter­ous lifestyles, and the bar­bar­i­ty of the grow­ing inequal­i­ty between rich and poor, cap­i­tal­ists, too, are like gold-stud­ded cogs in the wheels of the sys­tem. As Marx explained: “[C]ompetition sub­or­di­nates every indi­vid­ual cap­i­tal­ist to the imma­nent laws of cap­i­tal­ist pro­duc­tion, as exter­nal and coer­cive laws. It com­pels him to keep extend­ing his cap­i­tal, so as to pre­serve it, and he can only extend it by means of pro­gres­sive accumulation.”

If Hen­ry Ford had con­tent­ed him­self with blow­ing the prof­its from the first series of Mod­el Ts on a fan­cy vaca­tion, rather than invest­ing in new tech­nolo­gies, anoth­er com­pa­ny would have been first to inno­vate car pro­duc­tion. Ford would have become a foot­note in the his­to­ry of U.S. capitalism.

His­to­ry is rid­dled with such foot­notes of com­pa­nies that fail to inno­vate and then go under. Con­sid­er Block­buster, once a multi­bil­lion-dol­lar enter­tain­ment com­pa­ny, with over 9,000 stores and 60,000 employ­ees. the com­pa­ny took a rather abrupt turn to use­less­ness and bank­rupt­cy when it failed to stay ahead of stream­ing tech­nolo­gies. Block­buster passed up an oppor­tu­ni­ty to buy a then-small com­pa­ny named Net­flix for $50 mil­lion in 2000, unaware that most peo­ple would be watch­ing their shows and movies through the inter­net before long. Net­flix soon drove Block­buster out of business.

This is why both Marc Bell and his Star Trek-styled man­sion, and Ben Cohen and Jer­ry Green­field, founders of Ben and Jerry’s car­ing cap­i­tal­ism” ice-cream, are all dis­ci­plined by the same forces of the mar­ket, and are all com­pelled to accu­mu­late, or face bank­rupt­cy. Marc and Ben and Jer­ry, what­ev­er their per­son­al feel­ings about cap­i­tal­ism or Star Trek, must make enough prof­it to plow back into fur­ther inno­va­tion and pro­duc­tion. As Marx famous­ly described:

Accu­mu­late, accu­mu­late! That is Moses and the prophets! Indus­try fur­nish­es the mate­r­i­al which sav­ing accu­mu­lates.’ There­fore, save, save, i.e., recon­vert the great­est pos­si­ble por­tion of sur­plus val­ue or sur­plus-prod­uct into cap­i­tal! Accu­mu­la­tion for the sake of accu­mu­la­tion, pro­duc­tion for the sake of pro­duc­tion: this was the for­mu­la in which clas­si­cal eco­nom­ics expressed the his­tor­i­cal mis­sion of the bour­geoisie in the peri­od of its dom­i­na­tion. Not for one instant did it deceive itself over the nature of wealth’s birth-pangs.

We can see then that in real­i­ty the move­ment of cap­i­tal can­not be a lin­ear process with a begin­ning and end, but a con­tin­u­ous one, which must spi­ral in growth. When the sys­tem is run­ning smooth­ly, cap­i­tal­ists don’t sit on the cash they’ve made; prof­its are shov­eled back into new rounds of pro­duc­tion. Cash from this quarter’s auto, health ser­vices, or iPhone sales is used to finance next year’s mod­els. Each round of pro­duc­tion thus pro­ceeds from a more advanced posi­tion than the last, built on the larg­er amount of mon­ey gen­er­at­ed by the pre­vi­ous cycle.

Assum­ing a rate of prof­it (a con­cept I take up else­where in my book) of 50%, if a busi­ness begins by invest­ing $20,000 and pro­duc­ing an end val­ue of $30,000, by the sec­ond round of pro­duc­tion, instead of a $20,000 invest­ment pro­duc­ing val­ue of $30,000, we can now start with $30,000 and end up with $45,000. As Marx wrote: Looked at con­crete­ly, accu­mu­la­tion can be resolved into the pro­duc­tion of cap­i­tal on a pro­gres­sive­ly increas­ing scale. The cycle of sim­ple repro­duc­tion alters its form and, to use Sismondi’s expres­sion, changes into a spiral.”

This spi­ral­ing buildup of wealth brings us to the def­i­n­i­tion of cap­i­tal as the self-expan­sion of val­ue. On an indi­vid­ual basis, each cap­i­tal­ist has no choice but to expand prof­its and invest­ments or face insol­ven­cy. On a sys­tem-wide basis, this trans­lates to an econ­o­my that must grow with­out bounds. As David Har­vey explained: Just read the press reports on the state of the econ­o­my every day, and what are peo­ple talk­ing about all the time? Growth! Where’s the growth? How are we going to grow? Slow growth defines a reces­sion, and neg­a­tive growth a depres­sion. One or 2 per­cent growth (com­pound­ed) is not enough, we need at least 3, and only when we reach 4 per­cent is the econ­o­my deemed to be healthy.’”

Con­trast capitalism’s des­per­ate dri­ve to accu­mu­late and grow — at any human or eco­log­i­cal cost — with a social­ist, planned econ­o­my. Marx and Engels have been wide­ly mis­in­ter­pret­ed on the ques­tion of growth. They did cel­e­brate the pro­duc­tive capac­i­ty of cap­i­tal­ism and saw it as lay­ing the basis for a world of abun­dance that could make social­ism pos­si­ble. One famous pas­sage from the Com­mu­nist Man­i­festo reads:

The bour­geoisie, dur­ing its rule of scarce one hun­dred years, has cre­at­ed more mas­sive and more colos­sal pro­duc­tive forces than have all pre­ced­ing gen­er­a­tions togeth­er Sub­ju­ga­tion of nature’s forces to man, machin­ery, appli­ca­tion of chem­istry to indus­try and agri­cul­ture, steam nav­i­ga­tion, rail­ways, elec­tric telegraphs, clear­ing of whole con­ti­nents for cul­ti­va­tion, canal­iza­tion of rivers, whole pop­u­la­tions con­jured out of the ground — what ear­li­er cen­tu­ry had even a pre­sen­ti­ment that such pro­duc­tive forces slum­bered in the lap of social labor?

But Marx and Engels’ seem­ing appre­ci­a­tion of the pro­duc­tive forces of cap­i­tal had more to do with the future pos­si­bil­i­ties embed­ded with­in them, and noth­ing to do with the destruc­tive man­ner in which they cur­rent­ly man­i­fest. The sub­ju­ga­tion of nature to man, they not­ed in many of their writ­ings, has dead­ly effects, not just to the nat­ur­al world around us, but to humankind, which is itself a part of nature. As Engels wrote: Thus at every step we are remind­ed that we by no means rule over nature like a con­queror over a for­eign peo­ple, like some­one stand­ing out­side nature — but that we, with flesh, blood and brain, belong to nature, and exist in its midst, and that all our mas­tery of it con­sists in the fact that we have the advan­tage over all oth­er crea­tures of being able to learn its laws and apply them correctly.”

Marx and Engels were very much against the destruc­tion and degra­da­tion wrought by capitalism’s end­less growth of com­modi­ties. At the same time, they under­stood that these same forces have cre­at­ed the con­di­tions for a new soci­ety. The devel­op­ment of the pro­duc­tive forces of social labor is capital’s his­toric mis­sion and jus­ti­fi­ca­tion,” they wrote. for that very rea­son, it unwit­ting­ly cre­ates the mate­r­i­al con­di­tions for a high­er form of pro­duc­tion.” Social­ism would advance the devel­op­ment of society’s pro­duc­tive capac­i­ty. But the pro­duc­tion of goods that do not have price tags attached would lead to a very dif­fer­ent dynamic.

Rather than the com­pul­sion to pro­duce more and more stuff in order to accu­mu­late more and more prof­its, the pur­pose of pro­duc­tion in a social­ist soci­ety would be use, rather than prof­it. Human need would there­fore dri­ve deci­sion-mak­ing, and would pro­pel for­ward advances in tech­nol­o­gy and research for more effi­cient and sus­tain­able pro­duc­tion. Cap­i­tal relies on planned obso­les­cence” of goods made with non­durable and shod­dy mate­ri­als, or upgrades” in designs, which ren­der our expen­sive tech­nol­o­gy use­less with­in a year or two. This is one of the many ways that we are con­tin­u­al­ly induced to buy more. Social­ized pro­duc­tion, on the oth­er hand, would allow us to devel­op meth­ods that pro­duce durable and eco­log­i­cal­ly sus­tain­able goods. Simul­ta­ne­ous­ly, we could cut the amount of labor time for nec­es­sary for pro­duc­tion, and there­by increase our free time and unleash the cre­ative poten­tial of human beings unen­cum­bered by dread­ful­ly long work weeks.

Many things can and should stop being pro­duced imme­di­ate­ly — like mil­i­tary arms, and adver­tise­ments. Oth­ers ought to be dras­ti­cal­ly reduced as quick­ly as pos­si­ble, includ­ing cars and plas­tics. A social­ist soci­ety would there­fore need to tack­le plan­ning a sys­tem of pub­lic trans­porta­tion that ends the need for cars. Beyond that, a future soci­ety will have to take up com­plex ques­tions in facil­i­tat­ing the sat­is­fac­tion of human need with­out destroy­ing the earth that we live on. for instance, how do we want to orga­nize food pro­duc­tion? Research indi­cates that mul­ti-crop, rotat­ing agri­cul­ture, which is sig­nif­i­cant­ly more sus­tain­able for the soil, can also pro­duce more crops than the com­mon meth­ods of cor­po­rate farming.

Cap­i­tal­ism forces us into a spi­ral of accu­mu­la­tion for the sake of accu­mu­la­tion. Planned devel­op­ment to improve the qual­i­ty of life for the vast major­i­ty of human­i­ty on the basis of sus­tain­able pro­duc­tion and plan­ning is its polar oppo­site. That is the vision of a social­ist soci­ety. From there, wrote Marx, the pri­vate prop­er­ty of par­tic­u­lar indi­vid­u­als in the earth will appear just as absurd as the pri­vate prop­er­ty of one man in oth­er men. Even an entire soci­ety, a nation, or all simul­ta­ne­ous­ly exist­ing soci­eties tak­en togeth­er, are not own­ers of the earth. They are sim­ply its pos­ses­sors, its ben­e­fi­cia­ries, and have to bequeath it in an improved state to suc­ceed­ing gen­er­a­tions, as boni patres famil­ias [good heads of the household].”

Hadas Thi­er is an activist and social­ist in New York, the author of A Peo­ple’s Guide to Cap­i­tal­ism: An Intro­duc­tion to Marx­ist Eco­nom­ics, and a reg­u­lar con­trib­u­tor to Jacobin Mag­a­zine. She tweets at @HadasThier.

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