The compelling conclusion about capitalism that Piketty resists

The excesses of capitalism are not simply a question of bad management and a political unwillingness to properly regulate it by imposing the right sort of checks and balances, but symptoms of a fundamentally and irretrievably flawed system that tends toward destruction of human and other life.

The idea of capitalism as an expression of economic freedom that also secures moral and political freedom of thought, or the notion that “free-market” economies are guided by an impartial mechanism of supply and demand – an “invisible hand” to use Adam Smith’s metaphor – are both powerful indoctrinating notions. As such, they bear little resemblance to actual reality. Smith himself never used the word “capitalism,” preferring to call his economics a “system of natural liberty.” In fact, the inner logic of capitalism can be difficult to get hold of simply because there have been different configurations of capitalism throughout history. In its classic form, before the advent of corporations (when there was still an implicit sense of social responsibility, and insatiable greed was considered a vice), capitalism might have appeared less virulent. Additionally, there is reason to believe that capitalism unfolded differently in different countries with distinct political and legal frameworks.

All of these contingent factors are worthy of consideration in any assessment of capitalism. However, it is also reasonably clear that once we actually look at history, it is difficult not to conclude that pretty muchevery embodiment of capitalism – classical capitalism, oligarchic or corporate capitalism, casino capitalism, entrepreneurial capitalism – presuppose similar elements: private property, ownership of the means of production, notions of unlimited growth, the maximization of profit, using wealth to create wealth. They also all embody a form of instrumental rationality, the kind of rationality concerned with maximizing profits and minimizing costs. In its globalized corporate form, capitalism has been able to relentlessly realize this form of instrumental reasoning on a large scale – and thereby show itself as one of the most destructive and undemocratic economic system humans have ever come up with.

Unfortunately, neither propaganda nor abstract economic theory can help us to grasp this fact. The reason is primarily that the latter do not really speak to the false theories of human nature capitalism presupposes. Nor do many of them elaborate capitalism’s legitimating normative-moral or political origins. Most crucially, they are often silent regarding the devastating impact that it has had on the environment since it first emerged during the course of the eighteenth and nineteenth centuries. As Chomsky insightfully puts it, “There is “capitalism” and then there is “really existing capitalism.” What then is “really existing capitalism’?

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