In 2008 I had a MyBarackObama.com blog about the system failures created by capitalism, which I called crapitalism. Here is a list of related musings that I might explore in my November spy novel (for nanowrimo.org):
Cycles of competition
- Capitalism yields lower prices and better products through competition. When companies compete, the eventual outcome is that one company wins and the rest go bankrupt, are acquired, or merge in order to remain in the market. So the end result of a capitalistic cycle is an oligarchy, or worse, a monopoly.
- Once competition dwindles, some external force has to disrupt the system in order to consumers to benefit from capitalism. This could be (a) a new disruptive technology makes the monarch company a weaker competitor, (b) government regulation breaks up the monopoly so that the child companies have to compete with each other (somehow without collusion?) or (c) changes in the global supply of resources for the products. Perhaps one source is embargoed, or another one comes on the market in a part of the world where a competitor can now compete with the monarch company.
- I would like to offer a fourth option – (d) a coordinated (via social media and game theory) consumer boycott of just the largest company in a market. If a power union of consumers refused to buy any of the monarch’s product until that company was #2 in the market, it would provide an opposing force to the one force in capitalism. If competition produces winners, a winners boycott would create an incentive to strive to be #2 and to keep more players in the market. In this case, a non-competitive oligarchy would be the most common outcome. Whether that is any better for consumers is unclear, as it would create a much stronger drive for these companies to collude to set prices high and work together against the union of concerned consumers.
- Another tool consumers might use to fix the market power imbalance would be a wiki-leaks-style dossier on the 38 most powerful people in the world, outlining their connections and resources. This knowledge / surveillance would help make the oligarchy real in the minds of the public. I could even imagine a pirate youtube station turning this into a reality show where a team of people run constant surveillance on a real-world global conspiracy and the world’s youth tune in each day to have another crazy insider connection revealed. Kinda like a hybrid of Jersy Shore and the Daily Show, only much more like Adbusters Magazine in their politics.
Why is CRAPitalism bad?
- When companies stop competing, consumers get inferior products at a higher price. Take cell phones in America as an example. People willingly pay at least $50 and as much as $100 a month for a phone. Text messages used to be a surcharge when they cost the phone company $0.0000001 each (they are free so long as somebody is using a phone to talk somewhere). The same services in Kenya, for example, will run you $10 a month and many people get by on $3 a month. Full internet and phone will run you $30 a month. The products in America are artificially high because the market has faux competition – all the major companies collude to set one price that they market to the public as “the price” of a phone. Cable companies likewise have been convincing the public that cable TV ought to cost $70-130 a month, and not $30 a month like it did in the 90s.
- The corporate Oligarchy dumbs down the public. How?
- Corporate news products seem to omit the necessary details for the average person to be a smart voter, or to be critical of corporations. Knight-Ridder research found that the more TV news a person watched, the less informed they were about very important facts concerning the future of the world. Corporate media – such as Newsweek – put fluff on the US covers but put important news on the international version (because it is sold to a market that demands real news and is intolerant of news-prozac).
- Corporations use marketing to drive demand and set low expectations for their products – and without competitors who provide good stuff, the public goes along with the cheap = crappy misconception.
- People who don’t question are much easier to control. And when people stop getting real news each day, they are lulled into an unquestioning state. Michael Lewis recently noted that Obama only wears Gray or Blue suits, because each inconsequential decision he made reduced his future ability to deliberate on serious decisions. The main reason people fail to act like full citizens is that they are constantly busy with life. If corporations can keep people busy, they will deliberate less on decisions in the supermarket then shopping, and also be less informed in the voting booth. This is also why not owning a TV makes a person instantly better informed – they consciously choose and control their mental environment (the basic idea behind 15 years of Adbusters Magazine articles).
- An uninformed public does not raise questions when 16 trillion dollars is created out of thin air by the Fed and given to financial corporations in order to avert economic collapse. This is no longer capitalism when trillions are created in this way. It could never have happened if all of the preceding forces at dumbing down the public were not successful. The implications for my novel is that in order for this $16T to be absorbed into a global $52T economy, the value of everything else on the planet has to be lowered to offset such a large infusion of imaginary wealth.
- Crappy stuff – most production companies rely on planned obsolescence. Lawnmowers and bikes break in one third of the time they used to. Software cannot work with newer versions of itself. Everything comes wrapped in layers of disposable packaging, from detergent to boardgames. The wrapping is mostly to make the product look more valuable than it really is. This whole aspect of crapitalism is directly at odds with a world running out of resources. It will likely be the first part of craptialism to go away.
- Crapitalists create demand instead of working to supply the existing demands. Econ101 shows people a supply-demand curve for a market, but they neglect to point out that companies and manipulate both sides of the market. A saw a sign in the local gaming store in Boone, NC that said: “If you don’t buy it, you won’t have one!” Advertising is about creating greed for something that you never needed before. If companies focused on providing high quality goods that meet a real need people had to begin with, we would use less resources.
- Capitalism puts a larger portion of wealth and power in those at the top. You head that a “rising tide lifts all boats” but the metaphor is wrong, because the sea level differs in every zipcode. Since 1980, the rich have gotten richer and the poor have gotten richer at a slower rate, and for a decade have been barely keeping up with the rising costs of living. No capitalist ever promised that the free market would make everybody rich or even middle class – the masses just assumed this would be the case. I think on a larger level, those who get rich have to be taking their money from someone else somewhere on the planet. Wealth does not just create itself. Under colonialism, the wealth was extracted from Africa, Asia, South America. And today that wealth is extracted from the middle class and the poor, who lack the power to fight it.
So what happens when the resources (especially energy) start to dry up? I don’t know, but I’ll be exploring it in a fiction novel set 18 years in the future.