Over the past century or two, capitalism has been a massive success.
Well, there are at least three points there.
Firstly, even if we take your statement at face value, there is an inherent fallacy in thinking that a system’s historical success necessarily means it is fit for future purpose. Capitalism is not the first economic system this country has had and it was successful under its other systems too, but they would not be successful today because times change.
Any system has limitations and inherent constraints. Under certain circumstances, those constraints are not binding. Under others, they are. Capitalism is running up against some serious constraints right now that it looks particularly ill-equipped to deal with. There are two embedded assumptions that are beginning to fail in particular.
Firstly, the whole basis of capitalism is that of the concept of return on capital. Return on capital requirements are such that companies can’t just maintain steady profits, they need to show growth. But growth runs out at both local and global levels — local because once you have expanded a market, dominated it and then cut costs there is nowhere left to go and global because once you have reached crisis point on your use of resources, further growth becomes extremely detrimental. This is a crisis of late stage capitalism and we are starting to see it emerge all over the place. Developed countries have been generating return increasingly by replacing capital with cheaper debt rather than genuine growth, but debt brings inherent volatility (eg in 2008) as well as having its own limits.
Secondly, capitalism is based on the idea of something approaching full employment. However, this is under massive threat from automation. Although Trump rose to power on the basis of promising he will return jobs in the US from offshoring, the truth is that about 87% of jobs lost in America in the last decade or so have not gone overseas, they have simply disappeared to robots. The number of consultants I now interact with that are promising automation in the next ten years is frightening. Anything that currently requires a human to make a judgement based on acquired knowledge is under threat. It is not clear that jobs will be there to replace this wholesale loss of employment. And capitalism can not cope with wide scale unemployment; it just fundamentally breaks one of its underlying principles.
The next point is that capitalism is not just capitalism. A socioeconomic system also has features owing to its social structures, which interact in complex ways with its economic ones. I’m going to steal from what I wrote on
this post a bit here and repeat some of the pertinent parts:
me on above linked thread said:
By the "nature of society", I mean a lot of things, including:
- The activities and practices people engage in as part of society
- What the priorities and principles are of the society
- How identity is formed in that society
- The social order (i.e. how and why the society coheres)
- The nature of what is produced and how this is done
These things are all inter-related, as are many more concepts that become relevant depending on what is being considered, such as how technology affects all this, or how external factors might create pressures on it. It's a big concept.
The nature of society evolves and is messy. There are no clean breaks, and attempts at categorisation will always leave pieces unmatched. However, we can broadly tell the following very brief story of the UK. Following all kinds of historical types of society -- Feudal, agarian and so on -- we had the Enlightenment, which prioritised a certain type of identity and mindset, followed by the Industrial revolution, which created other types of social pressure. During this period, the foundations of capitalism were laid as the economic basis. By the time we reached the 20th century, we had a capitalist society that was built on industrialism. It relied on skilled labour, the most important freedoms were political in nature, people defined themselves by the jobs they did within that society (paid or unpaid). The "activities and practices" people engaged in were those of industrialism, namely communities built on this working self-definition. The social order was that of people having their place and understanding themselves through that place.
At some point in the latter half of the 20th century, however, things started to change. Consumerism started to take over, in which people defined themselves by "what they are into" rather than "what they do". Important freedoms became those of individualism, choice, market freedom. The "activities and practices" people engaged in started moving towards shopping as leisure, the advertising industry grew to drive a wedge into this self-expression through market choice and lever it wider. People were capable of building their own bespoke identity through their selection of goods and services to consume, and the use of these things as extensions of the self. Old social order broke down -- people became less sure of their "place" and they replaced it with a custom-made template of what "people like them" do, hang out with and spend money on. This happened in parallel with the nature of what is produced transitioning from large-scale manufacturing to a service-based and then increasingly finance-based economy, which can make use of transitory and unskilled labour.
I really don't think you can make general points about structures within capitalism and ignore these changes. At a surface level, the same critiques all still apply -- ownership of the means of production is still the engine of power, interests are still aligned along class lines, capital still protects itself. But the specifics of what that means for a society is very different. Individuals who have built their identity through the accumulation of consumer self-extensions engage differently to those who have built their identity through understanding their place within their work-based community
Finally, your statement that “capitalism has been successful” really needs investigation. What do you mean by “successful”? All measures of mental well-being have shown incredibly alarming trends in the last 30 years. A quarter of our teenage girls are
clinically depressed. Wider anxiety levels have reached epidemic proportions. Suicide rates have been broadly increasing. The population is not content, and it is their environment that has generated this. This is true for the entire populations of developed countries too, not just the poorly off. The social environment is mentally damaging the well off as well as the poor, and damaging us all in really worrying numbers and dangerous ways.
Note too that the gene pool is effectively identical to 50, 100, 200 year’s ago, it’s the environment that has changed. You can’t just complain that people are whiners, because even if they are, it is their environment that has made them so. We are collectively a product of our system, so if you don’t like the attitudes, it follows that you don’t like the system that generated them.
Personally, I can’t measure the success of a system purely in terms of material goods. We’re generating more stuff but it’s not making us happy, so what’s the point? In the end, it’s what it is doing to people’s overall well being that counts. On that front at least, our current system of late stage consumer-capitalism is a spectacular failure.
