Quaker Testimonies and the Predicaments of Capitalism

November 13, 2011 § 7 Comments

Competition

A few days ago, an Oakland policeman shot a young man with a rubber bullet while he was videotaping a police line at the Occupy Oakland demonstration. The man videotaped his own shooting, so you can see that, far from provoking the attack, he was actually trying to confirm that his behavior was acceptable to the police who were dealing with him. This incident illustrates one of the ‘predicaments’ of capitalism, as I call them, when viewed in the light of the traditional Quaker testimonies.

I call them ‘predicaments’ because capitalism is predicated on them: they are aspects of capitalism that inhere in the way the system defines itself and in the ways it operates; they are part of its DNA. And they are ‘predicaments’ for Friends because they violate our traditional testimonies.

I have identified five such predicaments:

  1. Private ownership of capital: Individuals (or the stockholders of corporations) own and control the money and goods or services that generate income when sold in the market; they own the means to produce these goods or provide these services—property, patents, machinery, etc.; and by virtue of this ownership, they have more or less exclusive access to the business’s profits and perquisites.
  2. Owner autocracy: Capitalism concentrates economic sovereignty—the right to make decisions about the company’s actions—in the hands of the owners of capital and, by delegation, their managers, in an overall system of vertical organization.
  3. Growth: The health of a business and of the system as a whole is determined in terms of growth; furthermore, the primary locus of value, the goal of the system, is profit, that is, surplus wealth, which is also a kind of growth. Capitalism assumes that economic growth has no limits.
  4. Mendaciousness: Capitalism lies to itself and to its participants in two ways, in regard to both its accounting methods and its conduct of competition in an open market. First, it deceives itself about the nature of capital and of overhead: It does not account for or take economic responsibility for the real value of the natural resources it treats as capital, or the real, final cost of disposing of its wastes safely, which is part of its overhead. It systematically undervalues both. And it deceives its customers in its marketing and advertising: it’s dependence on advertising in an environment of competition for market share tempts it to psychologically manipulate its consumers and to withhold information from them and from regulators. Capitalism lacks integrity.
  5. Competition: Capitalism is inherently competitive and assumes an ‘open market’ relatively free of direct government or collective social control. It makes everyone and everything both a competitor and an object of competition.

The Oakland shooting illustrates the predicament of competition: Competition inevitably leads to conflict; it is, in fact, an organized form of conflict. And conflict inevitably leads to violence. I don’t mean ‘inevitably’ in the sense that every instance of conflict will lead to violence, or even that any instance of conflict will necessarily lead to violence. People can always avoid using violence to ‘resolve’ a conflict (of course, violence never does resolve a conflict). But capitalism generates so much conflict that some of it inevitably turns violent because that’s how humans are.  Capitalism is inherently violent. Thus it violates our peace testimony.

Capitalism competes for everything and it drags everyone into its competition: Companies compete with each other for resources, labor, energy, customers, research breakthroughs, our attention, even our dreams. Workers compete with each other for jobs and for advancement; they compete with their employers for their compensation and work conditions. Industries compete with each other. Nation states compete with each other. And the economic system itself competes with all the other stakeholders in the planet’s ecosystems for the resources it needs to survive and to grow.

Does competition have to lead to violence? Enlightened business owners and national leaders can rely on cooperation and mutual understanding to resolve competing claims. This is most possible when the system is working well and no parties are near the particular edge or shortage that they fear. For capitalist competition is predicated on shortages—there is no need for competition if there is already enough of what everyone wants. But the system has these edges—these divisive thresholds—that necessarily separate the participants when they are reached—when oil supplies are threatened, for instance, or when employees demand new rights that cut into profits. And the disparity between those at the top and those at the bottom—between economic classes at home or between the overdeveloped and the developing countries of the world, for instance—these disparities create a distance of experience and worldview that undermines understanding even when intentions are good.

Of course, competition is creative, too, as its apologists so often claim. In their competition, Amazon.com and Apple drive each other to keep innovating and we get the iPad2 and the Kindle Fire, competing visions of the tablet. In the competition with the Soviet Union that Sputnik ignited, we got a generation of incredibly creative and productive scientists and engineers.

But we also get the Luddites smashing the mechanized frames of their early adopters in the British textile industry, and the violence of the state and then of the mobs in response. We get Pinkertons gunning down workers in their picket lines in the early days of labor organization. We get the first and second Iraq wars.

Because one of the defining characteristics of the state is its (theoretical) monopoly of deadly force, the dominant powers in the system—corporations—turn to the state to protect their interests. This is what gave that man in Oakland that ugly, painful, temporarily disabling bruise on his leg. The police almost always defend private property and the interests of the owners of capital, rather than workers, consumers or the integrity of the natural world. That young man was lucky, in a sense; that could have been—and often has been—live ammunition.

But we must acknowledge that that rubber bullet shooting escalates the conflict: the viral video of unprovoked police assault and all the other incidences of police violence we can see now on YouTube give the flywheel of violence another kick. They feed more energy into the feedback loop of violence: Demonstrators tussle with police lines => Police fire tear gas canisters => Black robed anarchists torch stores => Policemen shoot peaceful demonstrators with rubber bullets => . . . What’s next? I could not help but think of Kent State.

What to do?

Commitment to nonviolence and training in nonviolence prevailed in the civil rights movement. It doesn’t stop the violence, but it cuts it in half because one side won’t use it. It interrupts the feedback spiral. It helps in the competition for “hearts and minds.” And it is the right way to go. And it does address the seeds of violence in individual people. But it does not address the causes of violence, the genetics of violence embedded in our economic system.

So we are left with the queries: How can we reform capitalism in ways that will value cooperation at least as much as competition? And what can we do to break the feedback loop that escalates its competition into conflict and this conflict into violence?

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§ 7 Responses to Quaker Testimonies and the Predicaments of Capitalism

  • P.B. says:

    Police violence has nothing to do with private ownership of capital.
    There is probably a far greater chance of violence in a country where all means of production are owned by the state, rendering all power vertical.
    Under the communist system at the time of Stalin millions of innocent civilians were deliberately murdered. The Russian empire, which had a feudal agrarian economy, had a long history of police violence.
    I don’t think most members of OWS, at least in New York, see all those small capitalists who are losing business from their proximity to the protests as violent; in fact, I think they consider them to be part of the 99%. Most of those places are family-owned, hardly large enough to be tagged as vertical, and I’ve never experienced any violence at the hands of those small storeowners.
    As for “capitalists” lying about the ecological problems our world faces, what about the hundreds of “capitalist” firms which are investing in our environment? Though I certainly hope the government might find solutions to our environmental plights, we probably stand a much better chance of being saved by experiments being conducted now by private enterprises–both for-profit and not-for-profit–than by any government program I know of.
    As for regulations, capitalism and government regulations don’t have to be mutually exclusive, unless you support Ayn Rand.

    • I wasn’t trying to claim that police violence had anything to do with the private ownership of capital, though I do in fact think there may be a case to be made for this claim. I was linking violence to competition: that competition leads to conflict and that conflict leads to violence when the stakes are perceived to be high enough.

      • P.B. says:

        Human beings are competitive, whatever their economic system.
        You stated, “the causes of violence, the genetics of violence” are “embedded in our economic system” and you state that the first aspect of that system is private ownership of capital. In what aspect of our economic system is the “genetics of violence embedded”?
        In other words, how does capitalism produce more violence than does any other economic system?

      • I agree that human beings are competitive, whatever their economic system. But I agree with Forest Curo that capitalism unnecessarily feeds this tendency structurally, and in ways that other systems do not. But what ‘systems’ are we talking about? The ones that come to mind immediately are capitalism, communism, socialism and fascism. I would add the autocratic capitalist countries like China, Singapore, and Korea in the early days. indigenous gift-exchange economies, though most of these have been severely distorted in our time by the market economy. I think there are other kinds of tribal economies, especially among Arab and Muslim societies, but I don’t know anything about them.

        Communism (in theory) eliminates the competition for capital and resources, since these are held in common; or more accurately, perhaps, they are held as the commons, to which all presumably have claim in the effort to meet their needs. I don’t know Marx well enough to know whether communism is by definition democratic in its governance. Capitalism has inherited the feudal governance of its Western parentage, with a strictly hierarchical management structure. In any event, communism also eliminates the competition between workers for jobs, since the workers collectively own the means of production and, in historical cases, have maintained full employment, though not without other negative consequences.

        Socialism, as essentially communism lite, seems to do a better job of managing conflict between workers and only now is experiencing serious conflict between workers and managers/owners as socialist democracies try to deal with the distortions of American-style, full-blown, unregulated market competition through “austerity measures” as they try to compete with our longer work week, weaker labor protections, and, most especially, the lack of a universally shared (that is, socialized) healthcare system and public retirement benefits.

        The autocratic capitalist model is still in its maturing phase, but some think that the state will have to provide the kind of “benefits” that socialist democracies do, to a point, at least, in order to avoid social unrest. This may ameliorate the competition between owners and workers some, but I think all other forms of competition will stay in place. And workers may end up in competition/conflict with the state, as it fails to meet their needs.

        My understanding of fascism as an economic system is a bit weak, but it looks to me like autocratic capitalism, in that the state controls the economy to the degree that it can while the private sector remains capitalist. This may relieve some of the competition between companies and industries, as the state regulates their competition; and anyway, inter-company competition doesn’t turn violent. And since independent organization of labor is not allowed (I think), competition between workers will be suppressed: there will still be unemployment and downward pressure on wages, but workers won’t be able to do anything about it.

        That leaves the gift exchange economies. All we have left of gift exchange economies in the West is the economics of religious institutions and the arts; the arts in particular struggle against the distortions of the market economy. What I know of these economies, which comes from study of the indigenous peoples of North America (and the economies one can see at work in the Bible), suggests that many of the competitive tensions of capitalism are inverted, so that modes of production and self expression are organized in networks of cooperation and mutual obligation engendered by “gifts” and managed by family, clan and tribal dynamics and free association. There actually are no “workers,” a class created by the production/consumption economy, nor are there “owners”. So workers can’t compete with each other, workers and owners can’t compete with each other. Everyone produces and productive groups are rather fluid in their composition. For settled societies like the Lenape here in New Jersey, fields and hunting and fishing grounds are distributed by family, clan and tribal governance, and shortfalls are managed through systems of mutual support. For hunter/gatherers, like the Lakota and Ojibway, also tend to manage gathering sites the same way and they hunt the “commons”. I’ve never read of violent internal conflict over resources, or even distribution. Hunting parties tend to distribute any surplus outside the claims of the families of the hunting party.

        Well, I’m running out of time, here. But maybe you get my drift. Of course, the problem with gift exchange economies is that they are hard (impossible?) to scale up to populations the size of the modern nation state. Though now, with computers and the world wide web, we probably have the infrastructure we need to manage the exchange of “gifts” and obligations at this scale without the money and credit that is the lifeblood of market economies. How we would get there from here is another story.

  • forrest curo says:

    Some of these predicaments aren’t necessarily bad…

    1) Private ownership of capital: This can be compatible with the principle of ‘stewardship.’ In other words, one person or a workable number of people could manage an operation with the intention of using their resource to fulfill God’s intent.

    Moderate profits in such an arrangement could be seen to fall within “Don’t muzzle the ox that treads the grain.”

    2) Concentration of “power-over” an operation. In Adam Smith’s system, this was functional, with firms being controlled by individuals with unusual competence in their business. He was not expecting firms to grow so large that a few of them could impose near-monopoly control of their markets as Galbraith described; neither did he think any business could be run well by stock-market investors…

    Cooperative control might be more compatible with Friends’ principles, except that environmental havoc is a potential result of any collection of humans, whether working for individual or collective self-interest– or even out of disinterested human benevolence, if their perspective is too short-sighted!

    3) Geometric “growth” doesn’t fit in a finite environment– but “profit” itself only becomes a problem when people try to receive it without earning it: “I’d really like to have my money bring in more money without me doing anything whatsoever to ensure it’s being used for good purposes, without me even having to eat the risk if it gets used in unscrupulous or foolish ways”– but why on Earth would we want to honor such a notion?!

    5)– Competition can be a perfectly acceptable way of managing a resource. But competitions need to be managed: Thou shalt not be allowed to win a foot-race by shooting the guy ahead of you (or by doing anything else that diverts the competition into inappropriate channels: for example, turning the competition to provide a good product into a competition to out-market other providers, whether by lying better, making a shoddy-but-cheap product, putting in features (battery power?!) that result in products wearing out (shavers) or needing to frequently buy expensive supplies (ink-jet cartridges.)

    The real bottom line of competition: We can’t let it determine the distribution of essential human goods! Maybe you need to let some jobs be done by the person best qualified, but you don’t need to let a few people hog the work and force other people into idleness and indigence (after which you blame said other people for “not working!”)

    —–
    “What to do?” This is an insoluble problem, if it’s a problem at all. But given that we have Guidance available, the real problem is “How can I be led to continually seek and follow that Guidance?” Not that we needn’t think, but that help is available for our thinking.

    • forrest curo says:

      More re competition: As Galbraith pointed out, corporations often work to eliminate it by price-fixing, so they won’t get caught in price wars. Adam Smith: ~’You can hardly have two tradesmen meet without them starting a conspiracy in restraint of trade.’ Same principle with labor unions and (a lot of!) “professional qualification” rules:– If everyone can sell a certain product, the price is likely to fall below what anyone can live on!

      A couple decades back, I was putting out a poetry mag in the middle of the night, talking with the copy shop guy… ~’Everyone wants to retire and start a copy shop, because that’s a business they can all afford. So every so often we have a sale, reduce our prices to less than cost, drive them all out of business.

      And an example I just read about: Building two railroads to/from the same place resulted in several 19th Century bankruptcies. See http://www.counterpunch.org/2011/11/15/how-the-oligarchy-gets-politicized/

  • I like this analysis a lot.

    I do think it oversimplifies: the problems of competition, autocracy and mendacity are more basic than capitalism, indeed they are primeval, so that one does not get rid of them merely by getting rid of (or reforming) capitalism.

    But the argument that capitalism, by its very nature, legitimizes and exacerbates competition, autocracy, mendacity, senseless growth, and the hoarding of the means of production, strikes me as spot on, and seems a very useful starting point for further discussion.

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