The Two Big Lies of Capitalist Economics

by boog highberger

A social system cannot be enforced by police. It must be built on the acceptance of its basic assumptions by most of its members. If tomorrow we all decided to run naked in the streets they couldn't stop us--there aren't enough police. Laws can only be enforced when we police ourselves, when we have cops in our heads.

"Our social institutions are founded on certain ideas; so long as the latter are generally believed, the institutions built on them are safe...the weakening of the ideas which support the evil and oppressive conditions means the ultimate breakdown of government and capitalism." -Alexander Berkman

"The state is not something that can be destroyed by a revolution, but is a condition, a certain relationship between human beings, a mode of human behavior; we destroy it by contracting other relationships, by behaving differently." -Gustav Landauer

Capitalism works because most of us have swallowed these two big lies:

1) Society is best organized when people look after their own self-interest at the expense of everyone else's. In fact, this is human nature.

2) A healthy economy can only be based on ever-expanding consumption and production. This can go on forever. Science will overcome all obstacles to the continuation of this process.

Fortunately for those of us who are working on changing this society (but unfortunately for those of us who have to live in it), these are some of the nuttiest ideas imaginable.


"Society is best organized when people look after their own self interest at the expense of everyone else's. In fact this is human nature."

This idea arose with the breakdown of feudalism in Europe and the rise of the modern Western state. Thomas Hobbes was one of its earliest proponents in his _Leviathan_, where he argued for the necessity of a strong central state in order to prevent (or at least referee) the "war of all against all." Since the publication of Charles Darwin's _Tfhe Origin of the Species_ the idea of "the survival of the fittest" has become a sort of secular religion.

Adam Smith spoke of human beings' natural "jpropensity to truck and barter." Modern day beneficiaries of (so-called) free market capitalism have expanded on this notion and now ask us to believe that it is human nature for people to make themselves miserable in the process of piling up huge piles of cash, that those who do this best do so because they are superior people, and that furthermore it is perfectly OK for them to not be concerned about the other people they run over in the process.

The folks who ask us to believe all this fail to point out that this state of economic civil war is historically a very new thing. Far from being human nature, it is something completely outside the experience of most of the people who have ever lived. Society functions today not because of unrestricted economic competition between individuals, but because of what remains of mutual aid and human solidarity. This can be seen in the rising rates of suicide, mental illness, and other signs of alienation and social disintegration that are always associated with capitalist "progress."

Peter Kropotkin's _Mutual Aid_ gives the anarchist's answer to Darwin's dog-eat-dog view of the natural world. Kropotkin argues that cooperation plays at least as great a role in the natural world as does competition. He illustrates his point with many examples of individual members of animal species acting together to further their own and their specie's survival. Kropotkin also demonstrates the principle of mutual aid at work in a wide range of primitive societies.

Perhaps the fundamental absurdity of this idea of harmony-through-conflict can best be demonstrated with an example.

Imagine putting a bunch of people together in a room and giving them baseball bats and telling them that the way they will be best off is if they hit everybody else harder than they get hit in return. It won't take most people long to figure out that they will all be better off if nobody hits anybody over the head with a baseball bat. And even if a few big people decide that they can get what they want by ganging up on the little folks, they will soon figure out that they will be better off by sticking together than by continuing to hit each other (however, in real life, this often takes a long time to put into practice--see _The Wretched of the Earth_ by Franz Fanon for a good discussion of why oppressed people so often spend so much of their energy fighting among themselves rather than joining together to fight their common oppressor).


"A healthy economy can only be based on ever expanding production and consumption. This can go on forever. Science will overcome all obstacles to the continuation of this process."

This idea involves a denial of the basic laws of physical reality.

We live on a finite planet. It is physically impossible for the production of goods to keep expanding forever. We are finite creatures and can thus only consume a finite amount of goods and services.

A capitalist economy is by its very nature unsustainable. A capitalist economy operating in a "healthy" condition will eventually create the conditions that will lead to a crisis in its operation. Overproduction leads to recurrent recessions and depressions in the economy, and has been the driving force behind the incredible proliferation of weapons we have seen in this century. Industrial production has already reached a level that threatens global environmental collapse.

The capitalist economy is a giant pyramid scheme, borrowing from tomorrow to pay for today. Pyramid schemes are frowned upon (and are illegal in most places) because when they collapse the people on the bottom get burned. In the case of the pyramid scheme of capitalist economics the people who lose are our children, who don't have an inhabitable planet left to live on any more. The Lakota Sioux ensured the sustainability of their "primitive" society by always considering the consequences that their actions would have on the next seven generations. In contrast, calculations by modern capitalist economists discount values proportionately to their distance in the future--getting $1 now is more desirable than getting $20 in twenty years (or $10 or $50, the number will vary from economist to economist; the important point is that values very far in the future quickly become irrelevant in their calculations). long term sustainability is sacrificed for short term gain. Free market economists have not grasped the crucial insight of the ecology movement that we do not inherit the Earth from our parents--we borrow it from our children.

Capitalist economics rests on the assumption that people's well being increases proportionately as their consumption of goods and services increases. This is obviously not true. More Americans today suffer from disease caused by affluence than caused by poverty. Most Americans would be healthier if they had less--if they walked and rode bicycles instead of driving everywhere, if they ate grains & vegetables instead of HoHos & Tv dinners, if they played football rather than watching it on TV. And since they'd need less they could work less and slow down and avoid ulcers and other stress-related sickness. But there are no profits to be made unless an exchange takes place--if you grow your own vegetables instead of buying them at the store (and going to work making things for someone else so you can get the money to buy them at the store, etc.) then nobody else gets to make any money off of you. And the Gross National Product goes up when you start buying your carrots at the store (even though they don't taste as good as the ones from your garden), and this the capitalist economists hail as progress.


Obviously the first step each one of us can take toward changing this system is to refuse to be bamboozled by it any longer.

The second step is to encourage others to do so. One big advantage we have is that the assumptions that the capitalist system is built on cannot stand up to rational examination. The most revolutionary thing we can do at this point is to encourage people to think for themselves.