“The Protective system in these days is conservative, while the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favour of Free Trade.” Karl Marx, 1848.
Capitalism doesn’t work
Political persuasion aside, it’s clear that capitalism doesn’t function effectively. While few prominent figures seriously challenge the status quo, most people instinctively realise that something is wrong with our economic system. They’re right. Capitalism is finished. It cannot be refreshed or revived. Its own internal contradictions make its failure objectively certain. These contradictions are as followed:
The first fundamental problem with capitalism is that very few of us are actually capitalists. To be a capitalist, one must possess sufficient capital to make his or her own living. The majority of us must work for others to provide for ourselves and our families.
Equally as troubling is capitalisms inherent reliance on unsustainable debt, the clearest evidence of which we find in our gargantuan trade deficits (the amount by which a nation’s imports exceed the value of its exports). When what we sell cannot cover what we buy, we’re forced to sell assets or accumulate debt. We’ve only been able to do this for so long because we’ve created artificial asset bubbles, driving up prices. This cannot last.
This year, Australia’s trade deficit was $A37 billion. In the US it was $US666 billion. These numbers feel understandably distant, but their consequences are very real. Net foreign ownership of American assets now stands at $US2.7 trillion. The first $US2000 every American pays in tax goes to servicing the interest on the national debt.
Contrary to established opinion, capitalism cannot provide us with choice as it is fundamentally unable to prevent the rise of private monopolies. In the US, one in every two dollars spent goes to Amazon, Facebook and Google account for 98 per cent of growth in digital advertising and Walmart provides half of all products that American’s consume.
Dependence on big government
Capitalism is totally entwined with and dependent on big government. Indeed, this is its fatal flaw. Since the 1940s we have only experienced state-managed Keynesian capitalism. While many acknowledge this is unsatisfactory, history shows its capitalism’s only viable option. Before Keynesianism, the American economy was in recession 40 per cent of the time. Pure capitalism was finally discredited in the ‘great crash’ of 1929. We haven’t seen it since.
Despite this, dogmatic neo/classical liberals insist capitalism can do better if we’d only give it a proper chance. This is demonstrably false. Hayekian economics have enjoyed long periods of dominance, always resulting in the very things Hayek wanted to avoid: Bigger government and centralised economic power. Few would consider Reagan a socialist revolutionary, yet his economic programme tripled the Gross Federal Debt, from $900 billion to $2.7 USD.
It must be noted that the first two of these problems can be tempered by state protectionism and government intervention, but this simply illustrates the fatal wound. Capitalism cannot work without an interfering big government. As capitalism grows, so must government.
Capitalism is authoritarian
Authoritarianism is not the exclusive reserve of the state. The abuse of private power is just as disastrous. Corporations now know who we’re talking to, when we’re talking to them and what we’re talking about.
80 per cent of all political information In the US is accessed via Google and Facebook. The latter has already abused the ideological influence they possess. Several former Facebook ‘news curators’ revealed that the company were artificially injecting preferred leftist news stories into the widely viewed trending module while excluding conservative stories. Ironically, capitalistic evangelist Ted Cruz was among their favoured targets for suppression.
When corporate advertisers dislike an opinion, they can silence it by excluding it from the conventional economy. A ‘Sleeping Giants’ campaign, aimed at silencing conservative voices, managed to persuade 2600 companies to cut ties with Breitbart. They didn’t take much persuading.
Destruction of privacy –
As G. K. Chesterton wrote: ‘Capitalism is contradictory as soon as it is complete, for the master is always trying to cut down what his servant demands, and hence is cutting down what his customer can spend. He is asking the same person to act in contradictory ways. He wishes to pay him as a pauper, but wants him to spend like a prince’.
As a result, advertisers are forced to use increasingly aggressive and intrusive methods to ensure individuals are spending a greater slice of their income on consumption. The advertising industry employs a growing percentage of the workforce, pulling them away from more societally productive careers.
Capitalism is morally bankrupt
Capitalism is built on vice. Capitalists maintain that greed and self-interest can be converted into common-good. In reality, history shows that capitalism always results in the poverty of some and the extreme wealth of others.
The wealthiest 1 per cent of the World now owns more than the 99 per cent of us combined. Is that conservatism? Is it conservative to see families struggle each day, as individuals horde profits and productive property?
Capitalism breeds leftism
In human history, there has never been a society that has embraced capitalism while simultaneously becoming more morally conservative
This year, 844 corporations supported the redefinition of marriage in Australia.
Corporations are now the most powerful agents of social engineering on planet Earth. Their aim is to reinforce the fabric of atomised, hedonistic individualism on which they are entirely dependent.
Big business isn’t overly concerned with greater regulation and tax rises. They know they can accommodate such things far easier than their smaller counterparts. Their main focus is leftist social policy. If they can reinforce materialistic moral relativism, they can ensure we simply hand back our money, in their soulless whitewashed mega-malls.
It’s imperative we recognise that for every socially conservative step forward, economic liberalism shoves us two steps back.
Ethical economics – A conservative future
Capitalism bad – socialism worse
Socialism provides no real solutions, it simply transfers ownership of the problem from the hands of a few capitalists to the hands of a few politicians.
It’s understandable that capitalists, so repulsed by tyrannical communism and presuming capitalism to be the only alternative, should gloss over its problems and hail it as a moral better. They must be wary. People will only tolerate so much greed before they seek an alternative. If real conservatives don’t provide one – Marxists will.
Marx was a man of breathtaking evil, but let’s not pretend his writing isn’t powerful and compelling. The best liars appeal to our instincts, and Marx was a prophet of half-truths.
Marxism never died. It continued in cultural form, cultivating the free trade and corporate greed that its adherents hope will one-day lead to its full manifestation.
The warnings of Benjamin Disraeli are more crucial today than they’ve ever been.
Distributism is a credible alternative, although its name is a little misleading. It does not involve taking money from some to give to others, but rather an economy in which productive property is distributed as widely as possible.
A human science
Economics has never been a physical science. The twentieth volume of the Oxford English dictionary, completed in 1929 and designed to be the final resource on English words, didn’t even contain the word, ‘economics’. It has always been a subsection of political ethics. It cannot be divorced from ethics or morality. The decisions of unique human beings will always define its outcomes.
We’ve convinced ourselves that shipping a strawberry around the world before we eat it is the personification of efficiency. At the heart of distributism is the belief we should shift control of economies back to the communities they’re meant to serve.
This creates stronger localities, enriched by a wider choice of vibrant and personal businesses based on trusting relationships. It will also improve efficiency, as funding won’t feel distant and unaccountable.
Conservatism dies in cities. Therefore, it is essential to invest as locally as possible so that people are not sucked away from their roots towards high-rise metropolises. Eventually, families and communities should be encouraged to replace central government in financing and welfare.
A business should never be too big to fail. Thus, the size of businesses should be limited so that if one fails it does not bring everything crashing down around it. In business – small is beautiful.
Splitting the commercial and investment wings of banks would be a good first step towards a much-needed financial reformation and the elimination of the master-slave usury dynamic.
We must dissolve the barriers between capital and labour and encourage cooperative ownership of business. There have been numerous worldwide examples of highly successful economic cooperatives, guilds and mutuals. These should form the foundation of our economy. Humans need and love to work. All who want it must be able to find it.
For decades, productivity has been measured as the amount of output created by a certain amount of labour. It’s time for a conservative redefinition. To be productive is to work in a way that provides as much as possible for families and communities.
Capitalism isn’t broken, it works exactly how it should. That’s the problem.
Roger Scruton once said: ‘To be a conservative is to be a reluctant capitalist’.
He’s almost right.
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Got something to add? Join the discussion and comment below.