Episode #081 - Transcript

Hello, everyone. I’m Stephen West. This is Philosophize This!

So, let’s all imagine something real quick. Let’s imagine that you’re walking down the street with a camera and a microphone, and you’re interviewing just random people in an average city in the modern United States—you know, just the first person you run into walking their dog down the road. Statistically speaking, if you asked that person the question “Which do you think is a better economic system: capitalism or communism?” what do you think they would say? And by that I mean the economic ideology espoused by communism. I realize it’s much larger than that. Point is, what do you think they’d say? Well, I don’t think it’s a very controversial prediction to make that most Americans are going to say, “Capitalism. I was born into a capitalist system. Look at all the prosperity it’s afforded me and my family. Look at all the innovations that have come as a result of capitalism. In capitalism we have sprawling mansions in the Napa Valley; in communism you guys got refrigerator boxes to live in. In capitalism we have the Super Bowl; in communism you guys have who can chase the rat under the dumpster the fastest and get dinner.”

Now, maybe that’s a little extreme. But you know what’s interesting is that for several years of my adult life, this is not that far away from what I thought the differences were between the two. I mean, I don’t think most Americans are given a fair representation of the criticisms Karl Marx had of capitalism. And I think largely people are sold this bill of goods that communism and socialism—these are profane words. And if somebody even acknowledges that anything about them is possibly a good point, it’s tantamount to being unpatriotic or somehow a bad American. But there’s something else interesting about this. Around 20 years ago if you walked down that very same street and you talked to the people then, you’d be much more likely to find people that won’t even entertain the idea of socialism or communism, people that raise their eyebrows to someone even asking if we should consider that something other than capitalism might work.

But something’s changed in these last 20 to 30 years, hasn’t it? I mean, just look at these numbers. Look, we have Bernie Sanders, self-proclaimed socialist democrat not only capable of running for president but also giving Hillary Clinton a run for her money, winning entire states. Gallup just came out with a poll a few days ago: 35% of Americans view socialism in a positive light. That’s a far cry from the way that things were not too long ago, right? So, what changed? And a common answer to this question is that people are starting to see the very real flaws in a capitalist system, and they’re looking to move on to something that they think might be better.

But again, for years of my life I really had no idea that there were even critiques of capitalism. I thought it was case closed. I thought the only people that had a problem with it were people that were lazy, and they just wanted the government to give them everything so they didn’t have to work. But I got to tell you, boy was I wrong when I first opened up Karl Marx several years ago. Now, to be fair, not everyone that’s a proponent of capitalism is as naïve as I was about it. There’s a good friend of the show on Twitter, long time listener, and he referenced this week the quote, “Capitalism is the worst system, except for all of the others.” It’s a good quote. You know, most people probably fall into that category. Most people know that there’s problems with capitalism. They just see it as the best option that we got.

But nevertheless, whether we’ve refined a system better than capitalism in today’s world or not, whether the first iterations of Karl Marx’s vision of communism went horribly wrong or not, I don’t think anyone would disagree with the value of looking at well-thought-out criticisms of the system that we’re currently in, if for no other reason than to make it better. And this is the value of looking at the criticisms that Karl Marx had of capitalism, many of which have not been addressed, many of which possibly cannot be addressed because they’re built in systemically. I guess one thing we got to all accept as honest human beings is that capitalism is not a perfect economic system. And despite the fact that we were born into it and that we see its effects all around us all the time and many of them we see as good, it’s not the only way that things have ever been done. No, there are many economic systems that have been tried. And Karl Marx, as a philosopher taking a step back and analyzing them all next to each other, would say that each and every one of these economic systems have within them contradictions built into them that are probably the reason why they aren’t still in use today.

He called these competing forces built into these systems “internal conflicts.” The feudal system in the Middle Ages had certain internal conflicts that led to the revolution. Slavery in the new world had certain internal conflicts that led to the revolution. Marx is saying, maybe capitalism has these as well. What’s an example of one of these? Well, I don’t want to get too tangential here. We’re going to be talking about this later in the episode when we talk about his critiques. But I really want us to understand the systemic nature of these internal conflicts that Marx is talking about. And how, to him, they seem like unsolvable problems that will inevitably come to fruition no matter what we do because they’re built into the economic model itself.

One thing that a Marxist might say is an internal conflict within capitalism is that capitalists—you know, these people that control the means of production, owners of corporations mostly in our modern day—capitalists are always looking to make more capital. It’s kind of the whole thing there, right? But anyway, how do they get more capital? Well, Marx would say, a convenient place to start, and one that is a huge expense to most high-production, profitable entities, is employee wages. Employee wages can sometimes be 30, 40% of your total sales. So, the capitalist tries to compensate for this. They respond, and they make things more efficient at the workplace. Maybe they introduce technology to take over certain jobs. Maybe they lay people off, they have less employees do the same work that more employees used to do. They stagnate wages as profits increase. They do all this not because they’re bad people but because they’re operating within an economic system where capital is an intrinsic good.

Now, what happens, Marx says, is that naturally when you’re paying less people less money, capitalism begins to cannibalize itself. These competing forces not only make it so that the employees—you know, the consumers of what the capitalist is producing—have less money to actually buy what they’re producing, but it also ensures that, because of this intrinsic good of capital coupled with the inordinate amount of control that a handful of people have over the means of production, it ensures that without intervention the rich will always get richer, and the poor will always get poorer within a capitalist system.

You know, a Marxist would say—a common way that a Marxist would look at the economic history of the 20th century is that, since the inception of capitalism being the primary economic model in Western society, a lot has changed since then. They’d say it worked for a while. Workers in the Western world were living on sort of economic islands so to speak. They were able to demand a better quality of life from their employer: better wages, better work conditions, etc. But then around 1968-1971 depending on when you think global trade really started its massive expansion, the people that controlled the means of production in these capitalist systems that had to pay these people in the West all these higher wages, they looked at places like China and India and Taiwan, and they realized, hey, these people over here will do the same work that they’re doing for pennies on the dollar.

So, the jobs started leaving. Marxists often call this the mass exodus of jobs to the East. And they’d say that we’re actually still living in its wake in 2016. They’d say that, you know, how convenient that right around the mid-1970s that’s when people started taking out credit cards. That’s when people started going into massive debt as just a normal part of life. Fast forward to today and, just to graduate from college and to be able to contribute to society, you practically have to go into tens of thousands of dollars in debt, not to mention the house that you want, not to mention the car that you want.

Anyway, the point is, Marx believes that there are certain internal conflicts built into the capitalist system. And I guess the next question that we might ask is, why didn’t we see this coming? I mean, when Adam Smith writes The Wealth of Nations and he walks into some guy’s office that’s pulling the strings and he just slams his book on his desk—Wapow! Capitalism; read it!—Why didn’t we see these problems coming then? Well, the answer is pretty complicated, but one of the biggest answers and the most understandable is that we’re living in a completely different world now.

Really brief background on the origins of capitalism. So, during the transition phase between the feudal system and capitalism in Europe, there were a lot of families that used to live and work the land or be part owners of the land that were displaced because of things called Enclosure Acts, or things like the Enclosure Acts of the United Kingdom given your respective country. Now, the Enclosure Acts were a series of actions that made land that used to be common land into land that can be privately owned. So, naturally, the people that used to live on this common land had to find somewhere else to go. A lot of people had to find somewhere else to go and survive. So, it makes sense that they went to where the jobs were. Now, over this handful of generations at the dawn of the Industrial Revolution, these people would have practically no choice but to make a massive change in their lifestyle. They’d have to go from working in the land to working in factories or textile mills, things like that.

Now, it’s important to understand the mindset that these nation-states were in during this time. They were just that, nation-states that were competing with each other, nation-states that were emerging into new worlds that they could trade with. All of a sudden, you could trade with India and China and the American colonies if you want. The problem was, how are you going to make enough stuff to fill that new demand? How are you going to go from just making enough stuff for your nation-state and the surrounding neighbors to now 10 countries worth of stuff, 20 countries worth of stuff? How do you ramp up production that much?

Now, you couple this with the fact that it was a widely held view at the time that the export capacity of your economy is directly related to your economic strength, and when Adam Smith comes along and he introduces the ideas of specialization and division of labor, of course you’re going to grab onto that with both hands. Instead of having one guy that makes clocks all day long—you know, he works really hard for 10 hours, and he might be able to make 1 clock by the end of the day—what Adam Smith’s saying is, let’s have him specialize in making the cogs. Let’s have her over there specialize in making the springs. And with this more focused, specialized, menial task as the only thing that they’re doing all day, there’s much fewer moving parts to consider. They refine their systems faster and faster, and maybe eventually they can make 1,000 cogs in a day. So, collectively, 10 people might be able to make 1,000 clocks in a day in this new system as opposed to the 10 clocks they’d be able to make if each one of them had to do every facet of the clock production on their own.

Karl Marx would say, wow, what a great idea to make a lot of clocks. This is what capitalism is great at: making a lot of stuff and finding out what the next thing is we have to make and then making a lot of that stuff. But he’d also ask, is making the most stuff possible so that we can make the most money possible—is that all that we should be concerned about? Marx thinks it’d be one thing if humans were robots. But they’re not. We’re forgetting about the effects of the fact that it’s ultimately human beings that have to make all this stuff, which brings me to his first criticism.

One of the big criticisms he has of capitalism is that it alienates the worker from a sense of purpose or fulfillment. Now, the point he’s making is one that I think we can all relate to living in a capitalist system. We’ve all had a job at some point or at least known someone that’s had a job that they don’t really like that much. It’s boring, unfulfilling, makes you feel like a meaningless cog in a machine. Karl Marx says that this is a natural byproduct of that specialization that allows us to make so many clocks. Yes, specialization is great at making a ton of stuff, but the more specialized jobs become, the less important the person feels that’s doing the work.

For example, if you’re the guy down at the sriracha factory and you work on an assembly line, and you’re the guy at the end of the assembly line that puts the green cap on top of the bottles, all day long just green cap; it’s very difficult for you to see the positive effect that you’re having on society. You probably don’t walk into a teriyaki place after work, look around at all of the bottles on the tables and be like, “Yup, that was me.” No, Marx says to feel truly fulfilled we need to “see ourselves in our work.”

To explain what he means, let’s go back to the clockmaking example. If you’re the person that builds the entire clock start-to-finish, there’s a craftsmanship to that. There’s a connection that you have with it. The way that you build that clock is a representation of you and your personality. Let’s say that you make a simple, elegant clock made with attention to detail. Maybe that’s you. Maybe that’s the way that you approach every aspect of your life. Point is, you see a little piece of you within that clock. You walk around after work, and you see your clocks hanging around; and you feel like you’ve contributed something essential to the world. Sure, you can only make one of them a day, but the process was fulfilling to you.

But instead of that, Marx says, instead of making 1 clock a day, we’ve got this guy churning out 1,000 cogs a day and not caring about a single one of them. And he says what happens is that this dynamic creates a disconnect between what we do to serve others in our society and what we wish we could do or what we know we’re capable of doing if only the system didn’t require you to be so highly specialized in an attempt to make as much stuff as we possibly can. Now, again, for anybody that’s ever worked a really monotonous job and you felt as though you had so much more to give to your fellow human beings than just that, you can kind of see where he’s coming from here.

So, Karl Marx continues on and says, look, this alone would be a bad enough state of affairs, but the sad reality is that this isn’t the only negative effect on the worker’s state of mind that capitalism ignores. Another way that it undermines the employee is that it makes them feel terrified about how expendable they are as a single, insignificant cog in this machine. Look, if the recession in 2008 taught us anything it’s that we are far removed from the days where you are a loyal employee of the company, and you suck it up for the company, and the company takes care of you in good times and in bad. No, if it means a better bottom line for them, anyone is expendable.

Marx would have predicted this dynamic, and he says that this feeling that the worker has, this feeling that if they make a couple mistakes or if anything changes that’s out of their control where it’s no longer profitable for the company to have them as an employee, you know what happens. You have been terminated. Get out. This is a horrible, volatile place to spend every day of your life. And Marx says it goes all the way back to even our roots as human beings. We hate to be rejected. We’re terrified of, you know, wearing the wrong color shirt or having the wrong haircut and then having our friends or our tribe cast us out into the wilderness alone. To Marx, capitalism ensures that this is always the case for the worker.

Now, we can begin to see a pattern emerging here, right? What I mean is, both of these critiques of capitalism are a result of how production, and then in turn capital, is the primary thing to strive for and how that ignores and sort of dehumanizes the people that have to operate within it as workers. Again, like we talked about a couple episodes ago, to Marx, the working class is the exploited class. And he’d say, not only is their emotional quality of life being exploited, like in these first two examples, but also their physical production.

See, Marx believed that capitalism at its core was simply getting someone to do something for you for one price and then selling it to somebody else for a much higher price. And if you doubt this at all, Marx would probably ask you to take a look at the job that you have right now. At some point in the process of getting that job, you went in for an interview, landed the job, and they told you how much they’d pay you to do the work—let’s say $40 an hour. Now, at some level you realize that they’re profiting off of the work that you’re doing for them. If they weren’t, they’d either pay you less money or they wouldn’t hire you. Now, all that they’re doing there is getting you to do something for one price and then selling it to somebody else for a higher price. In other words, you’re not getting paid what you’re actually worth, just what you expect.

The difference between what you’re actually worth and what you expect, well, the companies have a name for this. It’s called profit. But to Marx, he says that profit is just a euphemism for theft. While you at the bottom are working hard producing more than you get in your paycheck each week, a handful of people at the top of the company are getting paid way more than they produce. Marx says, why does the system have to be this way? Why do we necessarily have to have a dynamic where a small handful of people control all the means of production and use that power to blackmail the working class? Are we destined to be this way forever? Is there perhaps another economic system we might be able to adopt that addresses this, maybe one that focuses on human prosperity exclusively as opposed to this capital stuff that claims to lead to prosperity?

And on that same note, Marx would ask, why in the world would we ever be so satisfied with this volatile economic climate anyway? Why do we like it so much? Every morning you turn on the TV, you see some dude in New York ringing a bell at the stock exchange. And these people spend all day long looking at numbers, looking at lines, tracking the volatility of the economy, of dreading the idea of there being some horrific crash of the numbers that day. “Oh, no! The squiggly line when down. No! Oh, wait, wait, wait, wait, it’s going up. It’s going—yes! It’s going up.” We just accept that every 10 years we have a steep decline. Maybe it fixes itself; maybe it doesn’t. Maybe we sink into a depression where people are just in bread lines, suffering, begging for work.

We’ve been told that these ebbs and flows of the economy are just a natural part of the world. But Karl Marx would say it’s a hallmark of capitalism. He’d say, yeah, remember before when the problem was that we couldn’t make enough stuff? Well, capitalism did its job. It succeeded. It made our economy way more efficient and productive. Congratulations. The problem now is, we’re making too much stuff. And the disparity between what’s being produced and what’s being purchased eventually compounds and causes these huge, volatile spikes.

Now, I’m not sure if that theory shores up with what we think we know in modern economics, but the important part to Marx is that we’ve done something pretty amazing there. We have actually created an economic climate that is so productive and so efficient that, in theory, no one ever has to go without anything. Never! What other economic system throughout history can claim to have done that? More importantly to Marx, we have more empty houses than we have homeless people. We have more cars in these unsold dealership overflow lots than we have citizens without reliable transportation. In fact, Marx says, if we have this capacity to produce way more than we would ever need, there’s more good news; not everybody has to work anymore. Why not just sit at home or explore hobbies and enjoy your life if you can? Why does everyone have to work?

The human species has done it. We’ve become so efficient with our economy, people get to go home early from work. The managers are going around the store finding people to send home. Point is, we as members of this capitalistic society have been conditioned to think that this state of not working is a bad thing. “Aw, shucks, the unemployment rate’s going up. It’s really high this month. Hope it goes down next month!” Marx would call it the freedom rate. And just think about that for a second. When we elect a president and beg for them to get America back to work, Marx would look at that process and see us as begging them to put us back in chains.

But anyway, it should be pretty clear what Marx’s position is given the similarities between these criticisms, right? It seems like there’s two fundamental problems with capitalism in his eyes. One is that private individuals have the ability to own the means of production, which is a very small handful of people. And number two is that when you give people that level of power over an economic system, they’re going to inevitably use that power to try to make the system work better in their favor.

For example, the idea being that, when a private individual owns a factory that has 500 employees and they all of a sudden see that they have the ability to go to Brazil and hire 500 people there for way cheaper than they’re paying now, it’s not surprising in that decision point that they choose to move the factory to Brazil and put all the other people out of work. Now, on the other hand, to Marx, if that factory—if the means of production—was controlled by the workers of the factory, not a private individual, well, they would never choose to move the factory to Brazil. They would never put themselves out of work. They would never go without the tax revenue generated to fund their community’s police force or their schools.

Anyway, maybe I’m getting a little bit too far into future episodes. Oh, speaking of future episodes, even though we’re going to be talking a lot about criticisms of Marx in the future—just when philosophers respond to him—I feel like it would be kind of wrong for me not to mention a few common ones right now. Keep in mind, again, we’ll talk about many of these in more detail soon.

One really common criticism of Marx is that everything Marx is saying is great on paper, but it’s actually not realistic. It’s actually a horrible, delusional utopia when it’s actually practiced. Another common one is that Marx fails to take into account human nature well enough, that there’s always going to be this subset of lazy people out there that don’t want to work, and that if we take away the capitalist structure it saps them of any motivation to even marginally contribute to society. Another one is that not every job out there is going to have people ready and willing to do it simply because it’s fulfilling to them, right? I mean, this isn’t like the guy that makes the clock that’s a representation of him. Some jobs just aren’t going to have that luxury. Like, nobody’s going to crawl into the sewer and unclog it because they, you know, see a piece of themselves represented in the overflowing fecal matter. Who’s going to do those jobs, Karl Marx? That’s the question.

Now, Marx would have responses to all of these, but the main thing he would say back to them is probably that at least the effects caused by these problems are manageable. Now, compare these problems to the problems caused by capitalism currently: the disdain that individuals are conditioned to have towards each other because they see them all as in competition with them, the terrible effects on the environment because of the ceaseless desire to keep producing and consuming more and more beyond our means; the massive income disparity where the top 70 people in the world have more than the bottom 3 billion combined, many of them dying of starvation, dehydration, curable diseases. I think Marx would say, look at the problems we’re satisfied with contending with as an alternative.

Alright, this episode was a huge test for me. I hope it was as interesting to you as it was difficult to write. Expect a new episode very soon. I’m back for real this time, guys.

Thank you for listening. I'll talk to you next time.