The Capitalism Papers: Fatal Flaws of an Obsolete System

The Capitalism Papers: Fatal Flaws of an Obsolete System

by Jerry Mander

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ISBN-13: 9781619021587
Publisher: Counterpoint Press
Publication date: 05/14/2013
Pages: 304
Product dimensions: 6.00(w) x 8.90(h) x 1.00(d)

About the Author


Called the the patriarch of the anti-Globalization movement by The New York Times, Jerry Mander was Founder and is a Distinguished Fellow of the International Forum on Globalization. He also spent 15 years in the advertising business as president of Freeman, Mander & Gossage, including producing the famous Sierra Club campaigns of the 1960s that saved the Grand Canyon. He has BS and MS degrees in international economics, and he lives in Northern California.

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CHAPTER 1

Economic Succession

This book anticipates the final failure of the global economic project that we have lived by, accepted, and treated as if it were nearly a law of nature for more than two hundred years. The capitalist system was able to thrive, on and off, during the eighteenth, nineteenth, and twentieth centuries, when we still lived in a world of richly abundant cheap resources, cheap (or slave) labor, myriad colonial interventions, and lots of developing markets. But it's now obsolete, nonmalleable, and increasingly destructive.

The system has reached a stage in its life span that is very familiar to ecologists and other students of natural evolution: A once thriving, even dominant species, in markedly changed physical circumstances, gives way to other species that are better adapted to current realities.

When applied to nature, it's called natural succession. When speaking of economics, however, the ecological philosopher Ernest Callenbach describes the process as "economic succession." I think he's got it right. The capitalist system had its day. If we care about the future well-being of humans and nature, it's time to move on.

The situation becomes especially urgent now that we're face-to-face with truly frightening macro-expressions of the limits of the earth's basic carrying capacities, which until only recently had been largely ignored. These include:

(1) Climate change, caused mostly by excessive carbon emissions, advancing rapidly in all regions of the planet. This brings with it the loss of lands from drowning — from ice cap runoffs and rising seas — or desertification, giant storms, loss of productive capacities, physical dislocations, and horrific new weather patterns.

(2) Peak oil, and the imminent global shortage of inexpensive, safe energy from any source, including coal, gas, and nuclear. Abundant cheap energy was the key underpinning of Western civilization and our economic system over the last two centuries. Large-scale industrial production, long-distance transport, export food systems, complex urban and suburban systems, and commodities such as automobiles, plastics, chemicals, pesticides, refrigeration, and thousands of others are all based on the assumption of ever-increasing cheap energy. Alternative energy systems, highly touted now, can never become an adequate substitute, as we will explain.

(3) The global resource depletion crises. In addition to fuel, we face major oncoming scarcities of fresh water, arable soils, food grains, forests, biological and genetic diversity, wilderness, coral reefs, life in the oceans, and key industrial minerals including coltan, zinc, lithium, phosphorous, and rare earth elements. These shortages, among many others, put the survival of modern society in question.

(4) A global population now past seven billion, heading toward eight billion, exacerbating all other conditions.

(5) And the social, environmental, and geopolitical chaos that goes with all the above, already expressing itself in conflicts and wars over oil, water, and myriad other resources on land and in the sea, increased militarism, rising protests against systemic inequity, and fierce battles over increased cross-border migrations.

All of these crises share the same root cause: planet-wide immersion in a uniform economic system that requires continuous rapid growth and constant wealth expansion for its own viability, and in order to sustain the institutions and the people who sit at the top of the process. Such a state of permanent growth in turn requires never-ending expansion of resources, cheap labor, and unlimited waste disposal and absorption capacity. It also requires the universal promotion of a values system that equates perpetual commodity accumulation and personal and institutional wealth expansion with success and happiness. These are all impossible on a planet with finite resources and carrying capacities. The system is bound to fail.

The great tragedy of the moment is that the powers that be in our society have failed to recognize or acknowledge the fundamental fact that Earth has limits, which are already in view, and that our economic drives are now inappropriate. This is a profound signal that we humans have lost touch with reality, about who we are, where we live, and how we live.

The central questions come down to these: Can industrial society, consumer society, and globalization survive in anything approaching their present forms? Would we even want that, given the human and environmental costs and the sacrifices involved? Can capitalism be reformed, adjusted, or made relevant to this moment? If not, what comes next?

The Missing Link

Day after day we hear the economy discussed from all sides of the political equation in exactly the same way. Whether it's Obama or Sarkozy or Putin or Hu, or it's Fox News or NPR, or Bill Clinton or John Boehner, or Mitt Romney or Larry Summers or George Soros, or Bill Gates or the Koch brothers, or Sean Hannity or Rachel Maddow, or Paul Krugman or Alan Greenspan, or Karl Rove, or even Robert Reich, everybody is now trying to figure out just one thing: how to revive and sustain rapid economic growth, which is equated with economic recovery and the larger visions of continued "progress."

Some say tax cuts, others say tax hikes. Some say stimulus, others say austerity; some say bailouts, others say no bailouts; some say jobs, others say investments; some say monetary policy, others say fiscal policy, and others say public works. Everyone is grasping for a magic elixir to revive rapid growth. Because without rapid growth, the mega-economic system that has functioned in this form for more than a century will collapse. They all agree on that point. How to build and sell more new cars? How to have more new housing starts? How to expand energy supplies? How to increase investment and bank lending? How to increase exports?

Perhaps most of all, how to increase shopping? This is the case not only in the United States, but in China, Spain, Chile, Russia, and just about everywhere else. How to get people to spend more money? How to commodify as much of life as possible? How to privatize what remains of natural resources, especially water, forests, open lands, biodiversity; and public services — social security, Medicare, the military, healthcare, prisons? Anything that has a chance to produce profits and increase economic growth.

But there's an important missing link in the discussion, ignored by everyone in the mainstream debate: nature. People behave as if our economic system were a self-contained separate entity residing in its own detached universe, unconnected to realities outside itself, rather than embodied in a much larger system from which it evolved and cannot escape. Nature cannot be left out. It is, in fact, the most important aspect of the entire discussion. Growth is made out of nature, transformed. What we call our economy is rooted largely in the process of transferring and transforming elements of the natural world into the tools and commodities of human activity, and then betting on the rates that we can continue to do it, nonstop, forever. To leave the source of it all entirely out of our concerns is, well, shortsighted.

Wherever you are sitting right now as you read this, please look around. Everything in your presence began as something from nature, mined from the ground, or harvested. The garments you are wearing, your shoes, the chair you are sitting in, the book or Kindle you are holding, the bed you sleep in. The car you drive and all its tires, wires, metals, parts. The phones you use. The walls and floor of the room, its carpet, the lights and the switches, the electrical line in the walls, the metals in your kitchen. All were once minerals that were dug up from the earth, then shipped around the world, transformed, assembled, shipped again to a store near you, and sold. Or else they were living beings — trees, plants, animals, fibers, corals — that had their own worldly existence, their own roles in living ecological systems. Even so-called "chemicals" and "synthetics" began as natural elements, later rearranged. Is your shirt made of polyester? Polyester is plastic. Plastic is oil. Oil used to be trees, plants, dinosaurs, sunlight.

The whole process of finding, recovering, and transforming these minerals, elements, energies, and beings into commodities that are shipped around the world and given economic value, and bought and sold, winding up in our homes, is what we call economics. The kind of economy we have come to depend upon, capitalist, was until recently highly efficient at delivering transformations, by using profits from previous transformations to do more of the same. And then wagering in financial markets on which part of these processes might grow and which might not.

But does this process go on forever? Can it? How can this possibly continue? Aren't we running out of resources? Where will the metals and minerals come from to build more and more cars, and where do we throw away the old ones? How many cars can be built and bought? How many roads can cover the landscape? How many new houses can be built on open land? Where will the food come from when the topsoils are overused and destroyed? How expensive will food become as transport costs continue to zoom? How much carbon can fill the skies? How much plastic can be dumped at sea? How many giant dead spots before the oceans give out? How much nature can be transformed into commodities and still remain viable?

"We imagined ourselves isolated from the sources of our existence," and we invented instead a "myth of endless progress," says the Dark Mountain Project, a new community of scholars, writers, and artists in the United Kingdom. "The fallout from this imaginative error is all around us: A quarter of the world's mammals are threatened with imminent extinction; an acre and a half of rain forest is felled every second; 75% of the world's fish stocks are on the verge of collapse; humanity consumes 25% more of the world's natural 'products' than the earth can replace — a figure predicted to rise to 80% by mid-century."

The World Conservation Union adds that extinction threatens 23 percent of mammal species, 25 percent of conifers, 32 percent of amphibians, 35 percent of mangroves, 20 percent of coral reefs. And that's before we get to the full effects of climate change.

South African environmental attorney Cormac Cullinan, author of Wild Law, reports on the UN Millenium Ecosystem Assessment, performed in 2001–2005 (including the participation of 1,300 scientists worldwide): The MA found that about 60 percent of "ecosystem services" are now threatened, including, for example, the ability of water to purify itself and of forests to contribute to clean air.

Economist Eric Zencey, of Empire State College, New York, says this: "In the standard view, the financial crisis besets an economy that consists solely of humans acting within formalized systems of their own creation — systems that have no connection to a larger world. That's why the standard views won't fix the problem. ... [It's] what happens when an infinite growth economy runs into the limits of a finite world. The financial crisis is the environmental crisis ... we can't solve the former until we start solving the latter."

Our society has blurred a most fundamental fact: Humans are completely dependent on the health of the natural world. In fact, we are part of the natural world, made of the same ingredients as the rest of life on Earth over which we have assumed dominion. But, having lost our connections to concrete reality, we don't grasp the predicament we are in. All of humanity begins to resemble the astronaut in space, spinning in his separate metal containment, millions of miles from the organic roots of our existence. We depend on nourishment that arrives from somewhere far away on ships or planes. We are disconnected from the sources of information we need, now brought to us only through processed images from distant places. We have no direct means of knowing right from wrong, or how to control our experience.

One thing is certain: We had better recognize this problem soon. Our horizons are not unlimited. There are boundaries to our aspirations. When we hear our political leaders renewing their race toward unlimited exponential growth, we realize they don't know what they are talking about. They themselves are lost in an obsolete set of mental frameworks, a thirty-centuries-long process to sublimate the most basic points of all: All of our economic and social activity depends on nature. We are not separate, and we are not in charge. Failing to grasp that fact while promoting ubiquitous economic strategies that remain unconscious of such realities may prove to be our most fatal flaw.

The "C"-Word

People throughout the world are already deeply concerned and talking about the problems of the capitalist system. However, most of them are not acknowledging that that's what they're talking about. Not long ago, I attended a speech by a leading environmentalist friend articulating the depth of the depletion crises we now face. He brilliantly described the problems inherent to our system — social, political, and environmental — and he spoke of the need for new economic paradigms that accept the limits of the earth's carrying capacities.

The talk focused on the urgent need for a revised system of economic values to modify the "present system," a term he used several times. But what "present system" did he have in mind? Why not name it? Did he mean "infinite growth" was the system? Are we worrying about a system called growth? There is no such system. The drive to destructive, never-ending growth is an intrinsic, fundamental expression, a subset, of an economic system named capitalism. I'm for naming the system.

In November 2010, I heard a speech by Bill Moyers, who quoted Socrates saying this: "If you are going to remember a thing, you must first name it." I like that a lot. Naming something diminishes its amorphousness and stimulates focus — what it is, and what it is not. On the other hand, Moyers didn't name capitalism, either, though he did put a name on the system: "plutonomy." That's a good name for what's going on now, but, like "growth," plutonomy is a subset of capitalism; capitalism produces plutonomy.

Another colleague, a leading liberal economist, last year said to me, "Jerry, I hope you're not really going to write that book about capitalism. Nobody even knows what it is. It has so many forms; it defies single definitions. Anyway, if you critique capitalism, per se, you'll only marginalize all of us as socialists, or worse." On a previous occasion, during a conference we both attended, called "Is Capitalism Soon Over?" the same colleague said that if the assembled group of economists and activists took a public stand against capitalism, he might have to leave. And yet in reading his writings, I can find only the most blistering critiques of the unnamed system, and very little that suggests that large-scale, free-market capitalism, as we know it, has any chance of surviving for much longer.

Nonetheless, he is exactly right to ask: While we are discussing the "C" word, what, exactly, are we talking about? The word is applied to many different iterations of similar economic practices.

The standard definition of capitalism goes more or less this way: An economic system dominated by private [as opposed to community, or public, or state] ownership of capital, property, land, and the means of production and distribution. Some definitions add that the system requires freedom from regulation, freedom of movement (geographic mobility), and unfettered free markets. All of those encourage continuous pursuit of financial self-interest, profits, growth, and economic and political autonomy (aka "laissez-faire capitalism" or "free-market fundamentalism").

American-style capitalism is probably the closest example in the world to the ideals of laissez-faire capitalism — the least government regulation or intervention of any developed nation — except for thosetimes when governments provide helpful subsidies, privatization schemes, military contracts, or other forms of supportive largess to corporations. The whole system focuses on the primacy of corporate expansion and profit. If government tries to initiate any kind of regulatory steps — an environmental law, for example, or regulations on the freedom of banks to invest depositors' money in risky ventures, or taxes levied on profits — these are often met with cries against government powers, as they are seen to defy the primary freedoms and drives of the system.

Another definition of a capitalist system comes from Yale University scholar Immanuel Wallerstein. In his book World Systems Analysis, he cuts to the chase:

"We are in a capitalist system when the system gives priority to the endless accumulation of capital. ... Endless accumulation is a quite simple concept: It means that people and firms are accumulating capital in order to accumulate still more capital, a process that is continual and endless."

That's the crux of the matter, I think: accumulating capital in order to accumulate still more capital ... continual and endless.

Or perhaps we should turn to the words of film director Oliver Stone: "Money never sleeps."

(Continues…)


Excerpted from "The Capitalism Papers"
by .
Copyright © 2012 Jerry Mander.
Excerpted by permission of Counterpoint.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Part 1 Introduction

I Economic Succession 3

The Missing Link 5

The "C"-Word 7

This Book 11

Disclaimer 11

Structural Arguments 13

II Growing Up Global 16

A New World Order 17

From Yonkers to Wharton 20

New Dawn for Business 21

Robert McNamara, Enforcer 24

Forty Years Later 28

III The Copenhagen Conundrum 30

Carbon Debt 31

Cochabamba, Bolivia 33

The Cancún Conundrum 35

The Morales Conundrum 37

Part 2 The Fatal Flaws of Capitalism

IV Intrinsic Amorality & Corporate Schizophrenia 43

Is Greed Good? 49

Everyday Life in Advertising 53

Are Corporations People? 58

Corporations Are Machines 60

V Intrinsic Inequities of Corporate Structure 62

Eight Intrinsic Inequities of Corporate Structure 64

1 Profits from Business Operation 64

2 Profits from Capitalization of the Public Commons 65

Cost Externalization 65

Limited Legal Liability 66

Exploitation of the Intellectual Commons 66

3 CEO Megasalaries & Bonuses 70

4 Stock Payments & Dividends 72

5 Invested Earnings: The Multiplier Effect 73

6 Wage Repression of Employees 73

7 The "Worker Productivity" Scam 75

8 Cashing Out: The Sale of Company Assets 76

The Illusion of Corporate "Efficiency" 77

VI Endless Growth on a Finite Planet 81

Ecosystem Into Economy 84

Gross Domestic Product (GDP) 85

What's Left Out of GDP? 87

Virtual Growth 89

"Planetary Boundaries" 91

Resource Shrinkage on a Finite Planet 92

Financial Speculation in Food Supplies 94

Privatization of Water 97

Peak Species & Peak Beauty 98

Earth Island 100

Fundamental Questions 103

VII Searching for Growth: Desperate Measures 105

Seven Explorations in Growing Growth 106

1 Shifting from Real Growth to Virtual 106

2 Creating "New Resources"-Privatizing the Commons 106

3 Expanding the Military Economy 107

4 Green Capitalism 107

Eco-pornography 109

Green Shopping 110

5 Search for Green Energy 111

Net Energy Limits 112

6 Creative Destruction 114

7 Techno-Utopianism & New Nature 119

Reinventing Nature 120

Atmospheric Engineering 122

Artificial Volcanoes 125

Debate: Intellect or Wisdom? 126

VIII Propensity Toward War 129

War as Economic Strategy 130

The stealth Economy 134

Doing the Numbers 135

Commercial Arms Trade 138

Military Keynesianism 139

F-35LightningII Fighter: $325 billion (Lockheed Martin Corporation) 140

Gerald Ford-Class Supercarrier: $120 billion (Northrop Grumman Corporation) 141

Future Combat System: $340 billion (Boeing and SAIC) 141

Littoral Combat Ship: $38 billion (Austal USA and Lockheed Martin) 141

U.S. Military Bases 143

Asia Pacific 144

Western Europe 145

Middle East 145

Africa 146

South America 146

Focus on the pacific 147

"Comparative Advantage" oe War 151

IX Privatization of Democracy 153

Rule by the Rich 154

Doing the Numbers 156

What Is a Billion Dollars? 158

The "Problem" of Surplus Capital 159

Investments in Government 160

Politicians for Sale 164

Koch Brothers: Role Models for Neofeudal Expression 167

Democracy? 170

X Privatization of Consciousness 172

Who Needs Advertising? 174

Living Inside Media 176

Advertising to Children 177

Global Reach 178

The Powers of Received Images 179

Are You Immune? 180

Is Television Real? 181

"Truth" in Advertising 182

Virtual Reality 185

Global Control 186

AOL-Time Warner 188

Disney 188

The News Corporation 189

Crisis point 190

XI Capitalism or Happiness 194

Laissez-Faire 195

Doing the Numbers 196

Consequences of Inequity 199

Economics of Happiness 201

Sufficiency 203

Summaries & Afterthoughts 206

Part 3 Epilogue

XII Which Way Out? 213

Four Megashifts Toward a New economics 217

1 Nature Comes First 217

Steady-state Economics 218

Contraction and Convergence 219

Biological Restoration and the Public Commons 220

The United Nations' Declaration of the Rights of Mother Earth 221

2 The Primacy of Scale: Not Globalization, Localization 222

Direct Democracy 224

The Indigenous Example 226

3 Experiments in Corporate Values and Structure 229

Redesigning Corporate Form 230

Worker-owned Cooperatives 233

4 Hybrid Economics 235

Central Planning? 236

Can We Learn from China? 237

New-economy Models 238

Uncharted Territory 241

Bibliography 245

Organizations 253

Acknowledgments 257

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The Capitalism Papers: Fatal Flaws of an Obsolete System 5 out of 5 based on 0 ratings. 1 reviews.
scottydback More than 1 year ago
I had read Manders Absence of the Sacred and Four Arguments for the Elimination of TV (a couple of times) so I got a little excited when I saw he wrote another one. For me, he didn't dissapoint. It's a clear-eyed look at the flaws of capitalism that are evident today with climate change, inequality, and our political system; all working in favor of the large scale corporate world or 'global economy'. Remember when your neighbor owned the grocery store, the hardware, gas station, etc,? One of your parents was a stay at home parent because one income could raise a family? Those days are gone and now a select few reap the benefits of our public commons. Why? Who elected these select few to benefit so greatly? Why do so few control our airwaves? Who elected them? Why do we have the choice between candidates who neither seem to benefit anyone but the corporate industry that funds them now? We have quietly moved from a democracy to a plutocracy, and getting dangerously close to fascist state as more and more of our choices are fashioned by corporate money. Mander does provide some ideas on solutions (local sustainability, etc.) but the reality is it will take radical change (one would be to shut off the noise machines) to reverse our course.