Even if we were able to prevent market forces from generating unjust outcomes and working mainly for the benefit of the rich, the fundamental values and motivations within the market are not desirable. The way capitalism functions involves powerful forces that tend to drive out good values and dispositions from the individual’s personality, and to weaken or eliminate good relations, customs and goals from society.
Over several hundred years market forces have been remarkably powerful producers of innovation, technical advance and progress in many fields. They have forced entrepreneurs to develop more efficient ways and to lower costs. But markets require and reinforce attitudes, values and practices that are at least not admirable, often despicable and in general not those we should be trying to encourage in humans. They often involve interactions that would not seem to be problematic, such as when two people discuss a transaction and agree amicably on terms. But even there your focus has to be on your own benefit, that is on self-interest; you do not focus on what is good for the other person or for society. Typically the situation is more problematic, involving and requiring acquisitiveness, greed, taking advantage of others, cheating, predation and deceit. The market situation does not involve or encourage altruism, generosity or care for the other.
At the mild end of the list, prices in the market are always set as high as possible, because the driving principle is to maximise wealth. Price is not set by reference to the cost of production (for example, metal spectacle frames are probably priced at fifty times their production cost), or the capacity of the seller to make a sufficient income, or by what the buyer can pay, or what the maker’s needs are. Markets are always about sellers trying to get as rich as possible, and buyers trying to pay as little as possible. The seller does not ask himself what is enough; he asks what is the most he can get. In medieval and ancient economies there was often the idea of a “just price”, but we have no such idea now.
The basic incentives built into the system are undesirable. The conventional economist thinks that if supply falls price naturally and automatically rises. This is not so. If you are running out of bread in your home economy the price does not rise. You decide who should have what’s left in terms of what’s best for everyone. Price only rises in situations where sellers find they are able to demand more and therefore they can choose to raise their prices even when they have no need to. At the very least, that’s not nice. Because pharmaceutical companies and dentists set prices far higher than they need to many people go without what they need, and in fact large numbers in poor countries die.
Then there is the built-in motivation for routine outright deception, deceit and lying, most obviously in dishonest advertising. When you buy a big packet from the supermarket you will probably find that it is only three-quarters full. Why don’t torch switches last long? Why so many non-repairable throw-away products?
Contrast these bad incentives with those that would be built into a good economy. It would both require and reinforce cooperative caring behaviour, i.e., behaviour intended to help others and to advance the public good. The social conditions outlined in Chapter 11 would involve us in mostly face-to-face interactions with familiar people in a climate of cooperation to help our town flourish. And there would be no need to maximise income and no point in getting rich. But in the present economy there is no incentive for generosity, kindness, helping, concern for the other or the public good or the environment.
Above all, our whole society is now driven by a self-interested marketing mentality. The primary concern is (has to be) to calculate benefit to oneself, to think about property values, success, rising in the firm, and making as much money as possible. These are not preoccupations that are good for humans. They do not make us better persons or contribute to our “spiritual” growth. There are more important things to focus on.
There are direct connections between this economic system and the increasing loss of social cohesion. Leigh’s books Disconnected (2010) and Reconnected (Leigh and Denton, 2020) report deterioration in many indices of social cohesion in Australia. Social problems are increasing as more people are being stressed, “excluded” and dumped into the “precariat” by this economy. This makes them discontented and troublesome and it undermines social solidarity. Leigh and Tyrrell (2020) document the shift towards a more mean and selfish society, and less willingness to volunteer, join and share. For example, people who can’t find work are not just given miserly assistance, they are increasingly denigrated, harassed, penalised, and accused of being lazy.
Around 40 million Americans have no wealth and no medical insurance. About 30 million work but are paid less than the poverty-level income. It should surprise no one that the nation is wracked by squalor, festering city slums, crime, violence and an intractable illicit drug problem. (See Chapter 8.) In the UK and Japan loneliness is now such a problem that their governments have established government ministers for it! (Yeginsu, 2018.)
What are the causes of this social breakdown? Firstly, because in this society market forces and growth are the supreme concerns governments try to skimp on spending on socially beneficial purposes and therefore on welfare programs and assistance to communities, especially to those in most need. Governments want to cut taxes on business in order to stimulate the economy and attract foreign investment, and as a result they have less to spend on social bonding. The corporations and banks and their credit-rating agencies like countries where governments do not spend much on public goods, which would require higher taxes on investing corporations.
Secondly, it is an economy which does not need all who want work so it dumps many into unemployment, poverty, lack of purpose, drug addiction and homelessness, i.e., into conditions which can only generate negative and destructive social consequences. It is not surprising that indices of breakdown, such as suicide and drug abuse, have increased in recent decades.
This economy stresses just about everyone. It should, but does not, enable people to relax and enjoy life free from worry. The competitive pace is constantly cranked up. People are working longer hours, because the conditions of work are increasingly made to favour more business turnover. They have to worry about the security of their employment, their capacity to pay the mortgage, their care in old age and their safety on the streets. Firms are downsized, making the remaining workers do more, and comply out of fear of losing their jobs. The emergence of the “gig” economy and the “precariat” means many now work in poorer conditions, without holiday or sickness cover. It is not surprising that depression and stress are now almost the most common causes of illness in the richest societies.
The book The Myth of Normal (Mate and Mate, 2022) points out that these conditions constitute a toxic culture causing vast amounts of physical and mental illness. Stress makes the body react badly, and this society imposes many sources of stress almost constantly on almost everyone. The book explains the wide range of illnesses that result. Our biggest health problem now seems to be depression. Yet this stressful situation is regarded as normal; it is accepted that life is difficult, a struggle. Evolution has not shaped our minds and bodies to be healthy in such conditions.
Of even more concern is the mentality that comes with the increasing focus on market relations. The more emphasis that is put on “getting the economy going”, on individuals competing to succeed, the more damage that occurs to social relations, community, social cohesion, trust, concern for others and concern for the public good. In pre-industrial times people produced and received many goods and services outside the cash economy, such as from within family and community. People gave things to each other, helped and did things for friends and family and neighbours. In consumer society we must increasingly relate to each other as individual, self-interested, isolated competitors in a hostile market place, exchanging things only for cash.
These forces and conditions produce “a marketing personality”. As noted above, when you go into a market to buy something the situation does not encourage you to think about what would be good for the other person or society as a whole. Your attention focuses only on what will maximise your own advantage, and you must be selfish and suspicious of the other. Because we live very privately in a consumer society and are given relatively few goods and services freely by friends or neighbours we are less likely to feel gratitude and debt, or bonds of affection to others. We buy and pay for most of the things we get. The more society is commercialised the more the goods, services and experiences we get become mere commodities. Whereas an exchange of gifts or voluntary help builds bonds of trust, gratitude and friendship between people, the purchase of commodities does not. Living in this society increasingly involves purchasing what we want, as competitive, self-interested individuals. Tribal societies provide much more shared experience, such as cooperating in food production, ceremonies and community life, and gifting. Individuals do not get used to pursuing what they want as an isolated competitor in a market.
There are therefore subtle but powerful forces at work in this economy which weaken and drive out social considerations, especially concern for the other and for the good of all. Market relations damage social relations and bonds, yet governments and economists are eager to increase the scope for market forces to determine what happens in society. One of the worst things about the Neoliberal mentality is that its defining focus is the elimination of community, mutuality, altruism, collectivism, and concern for the common good.
Over centuries this marketing mentality has increased to the point where we now have not a society with a market economy, but a marketing society. Kunstler (2020) says, “Social capital is exactly what Walmart and things like it killed in every community from sea to shining sea.” Lubin (2018), quoting Graeber, says, “financial imperatives constantly try to reduce us all … to the equivalent of pillagers, eyeing the world simply for what can be turned into money …”
The saddest part is that the dominant marketing mentality diminishes us; it is narrow, mean and stultifying. A person’s consciousness, preoccupations and world view are taken up with the wrong concerns. There are more worthwhile and admirable things to be concerned with than trying to cope, trade for more, accumulate wealth and defend against others out to disadvantage you. In a good society we would need to give no attention to competitive struggle for material sufficiency, so life could be about enjoying life, contributing to community, exploring the universe, enabling good things, thinking and appreciating and becoming a wiser person.
In his influential book The Great Transformation (1944) Polanyi argued that in all societies before the time when ours began to emerge around the fifteenth century, the economy was a minor component and society operated according to the moral, customary and religious rules governing everything in society. Market forces were either not allowed to determine what happened or were subject to strict control by the general social, moral laws. Gain and profit either were not involved or not important. What mattered was sufficiency, subsistence or producing for use and meeting needs. Polanyi argued that by allowing the market to become separate and free from social control our society has made a serious mistake, because in time the market will destroy society and the ecosystems it depends on.
In medieval times there were strong moral rules governing how you were to treat each other, including in economic transactions. You were not supposed to take advantage of another in exchange or trade, you were supposed to charge a “just” price and pay “just wages”. As in all other interactions, you were supposed to do what is just and fair, for instance refraining from charging a lot if someone is desperate for something you are selling. In trade neither party should end up feeling disadvantaged. But as Polanyi points out, with the coming of capitalism these rules were gradually replaced by rules that allowed marketing principles to determine what was permissible. Now we accept that if someone is forced to sell it is alright to pay him as little as possible, regardless of his need. Consider the “fire sale”. It is also alright to charge far more than the item cost you to buy or produce. There is no concept of a fair or just price or a fair day’s pay. You charge as much as you can get and you pay as little as you can. In trade deals poor countries are forced to sell cheaply because they desperately need income. This is how markets work, and if you go into them focused on anything other than self-interest and maximising then people will take advantage of you. In other words, economies previous to our own were very different to ours today.
I asked a legal firm if they could organise the transfer of any funds left in my superannuation account after I died. They said they could draw up the required document…for $800. Some years later I found out that the arrangement could be made via a standard short form, at no cost.
She had to leave Sydney suddenly and couldn’t take the big mirror she had used for dancing practice. She was going to break it up so it could go in the rubbish bin, but when I said I could cut it up for my solar power experiments she said just take it. I phoned a glass company to find what it was worth and paid her that much.
The legal firm’s behaviour would be regarded these days as a fairly normal market transaction; make an offer and the other is free to accept or reject it. Buyer beware. But the firm was taking advantage of my lack of understanding of the situation: they knew that what I wanted need not involve any cost, and they could see that I didn’t know that, which set them up for an easy killing. Polanyi’s point is that in medieval times this would have been regarded as a serious moral transgression, a sin. His central theme is this separation that took place between economy and society, whereby the economy came to be regarded as an arena in which some basic social rules no longer applied. In time the only factor that needed to be taken into account in economic interactions came to be maximising gain for the individual.
Polanyi argues that this great transition is so destructive of society and the environment that it led to the enormous social turmoil of the late-nineteenth century culminating in World Wars I and II. Followers of Polanyi argue that our current problems are largely due to allowing the market so much power, and that we must try to “re-embed” the economy in society; i.e., put it under social control again. But since he wrote there has been an acceleration in the effects Polanyi warned against, due to the advent of Neoliberal globalisation.
“Re-embedding” the economy and putting it under social control means making sure that general moral rules again govern economic interactions, rules such as do not take advantage of others. Obviously these are the kinds of rules that make social order possible. In fact, they more or less constitute the society. You can’t have a society made up of individuals driven purely by self-interest. There must be commitment to rules which are pro-social, which ensure that individuals do not just do what benefits themselves but will feel at least some obligation to do what is right or good for others and society. Further, there must be social bonds including feelings such as trust, security, familiarity, moral obligation and debt and the legitimacy and satisfactoriness of arrangements. Without these there can be little if any social cohesion. This shows the comical absurdity of the famous Thatcherism, “There is no such thing as society, only individuals.” But if you only have self-interested individuals you have no society at all.
The advent of Neoliberalism has driven us far in this direction, firstly by reinforcing selfish individualism as not just morally acceptable but as the main factor that ought to drive society, and secondly by creating the inequality and social wreckage undermining faith in our society. Discontented, deprived and ignored masses vote for Trump and join fascist movements, politicians are despised, respect for expertise and science deteriorate, and belief in democracy fades.
The importance of more collectivist ways is evident when we compare the nuclear and extended forms of family. In the nuclear family two people usually have to cope with all needs and problems on their own, with relatively little access to help. But in a tribe or extended family there are many others close by who can quickly be called on to help out. It is not surprising that the nuclear family fails so often, causing immense difficulties and distress.
But why do we have such individualistic ways? A big part of the answer is simply that for several hundred years we have had a basically capitalist economy in which entrepreneurs go it alone and workers must seek jobs as individuals. The factory owner does not hire a family. Workers must be highly mobile, that is, able to move to where new jobs are when a factory closes, and that means he and his nuclear family must be able to up anchor and move, without bringing grandma and the uncles with him.
Another part of the answer is that in individualistic societies a great deal of emphasis is put on success, which is usually defined in terms of the individual rising in income, power or status. The main way to do this is to beat others in competition within the economy, to get rich or rise in the corporation. The opportunities and avenues for doing this oblige you to be entrepreneurial, to strive on your own.
Striving for success also involves consuming. You need to keep up with fashion and buy an impressive car or house. The beauty industry reinforces the individual’s obsession with appearances and impressions. The advent of social media fuels the frenzy. All this is great for the economy; it generates a lot of purchasing.
This emphasis on individual success and status is a delight for the very few winners, but not so good for the rest of us. Unfortunately, this society idolizes winners and is not very interested in making sure that there are few or no losers. A good society would put a lot of effort into making sure there are no losers. In 2019 the Australian attitude was evident in the acceptance of the government’s policy of forcing many unemployed people who are desperately seeking work, including skilled and experienced older people unemployed through no fault of their own, to live on $16,000 a year, one-fifth of the average income and only three-quarters of the poverty line.
Individualism is also evident in the dormitory suburbs with their houses for single families which typically have nothing to do with any others in the neighbourhood. We rarely get together with other households to do anything for each other, such as share tools, organise working-bees, organise picnics or concerts, run poultry co-ops or community gardens and orchards or child-minding arrangements. If we did things like this we would reduce the amount of purchasing going on so an economy geared to maximising GDP isn’t going to encourage them.
These themes can be discussed in terms of lack of community. Many of our society’s problems are due to this absence of an extremely important element in a good society and for a satisfactory quality of life. Yet its significance is not given much attention. The meaning of the term is debatable and the area is not well understood, but community would seem to involve the following elements.
Having many familiar personal relations. Friendliness, frequent “face to face” interactions.
Solidarity, support, cohesion and security. People have concern for the welfare of the place and its people. I know others care about me and will assist me if necessary.
Identification with a collective, movement or place. I am a member of this community. This is my town. I feel at home here. I belong here. Earth bonding.
Moral bonds, debts and obligations. Giving and receiving. Voluntary contributions. Mutual concern and assistance. Interdependence. Reciprocity. Concern for the public good. Common values and responsibilities. A sense of civic responsibility and of collectivism. Feelings of solidarity, trust in others, comradeship, a climate of good will and expectations which will guarantee access to friendship, security, cooperation, assistance and pleasant social experience.
Traditions, rituals and celebrations. Events and dates that are significant in the history of the town. Things we celebrate together.
Note how none of these elements has anything to do with money or wealth or possessions or the size of the GDP. Raising the GDP does not improve any of them. These elements constitute social wealth; the more and stronger they are, the richer the society is. In a strong community people have a lot of relationships.
These sorts of factors are much more important in enriching life than merely having financial wealth. In non-industrialised societies people devote a great deal of time and energy to maintaining them. But in a capitalist economy there are powerful forces damaging and driving out community.
Within the global Eco-village movement the top concern is community and surveys report that they have higher levels of life satisfaction than are found in the average suburb or town. (Lockyer, 2017, Grinde et al., 2017. The alternative economic arrangements to be argued for in Chapter 10 follow those evident within Eco-villages. The argument will be that this very different social situation would prevent most if not all of the breakdown occurring in present society, the loneliness, depression, suicide, drug and alcohol dependence, family breakdown, and crime because people would be immersed in supportive communities with lots of interesting and important things to be involved in.
These themes to do with the connections between capitalism and society also involve views about human nature. A particular and highly challengeable view is embedded in capitalist ideology. The dominant assumption in our society for a long time has been that humans are naturally selfish, aggressive, competitive and acquisitive, and so we have to accept an economy that is based on such behaviour. It is accepted that competition is natural and inequality is inevitable, so some will win and some will lose, and the most able succeed and deserve their wealth.
But this is a largely false description of humans. They are predominantly cooperative, helpful, kind and enjoy social interaction and mutual assistance and seeing others flourish. Compare how many times you have observed humans being nice to each other with the number of times you have seen them being nasty to each other. We spent several million years in tribes that would not have survived had they not been predominantly cooperative. This is driven home by many analyses, notably by the anthropologist Richard Leaky (1981), Kropotkin (especially in his Mutual Aid, 1902) and Bregman’s recent Human Kind (2020.) As Leaky says, “Humans could not have evolved in the remarkable way in which we have unless our ancestors were strongly cooperative creatures … there must have been extreme selective pressures in favour of our ability to cooperate.”
Kropotkin details the way many species of animals, especially humans, have a remarkably powerful drive to enjoy social interaction, to cooperate and to please each other. We like to interact and care and do things for each other. We are capable of nasty behaviour but in general if people are not antagonised or deprived they not only get along well but like being friendly and helpful. Kropotkin’s account of the medieval town economy (below) provides a stunning example of how humans are capable of building mutually beneficial socio-economic systems.
It is evident that this negative definition of the human being is a key element in capitalist ideology. It is in the interests of the capitalist class for us to take it for granted that we are naturally competitive and so must accept a competitive social system in which it is alright if a few win most of the wealth. What’s more, in capitalist society we have no choice but to behave in these ways so we come to see them as “natural”. And because humans are so nasty they need to be governed by elites with the power to keep order.
The social arrangements and psychological characteristics of a basically capitalist economy outlined above contrast starkly with those of the medieval town economy. A short indication of this illustrates firstly that there are many forms of economy and secondly that some involve far more admirable values, dispositions and ways than are found in a capitalist economy. Kropotkin’s book Mutual Aid (1902) provides an impressive outline of the functioning of the guilds in medieval societies.
There were many kinds of guilds but most were engaged in producing goods and services. The guild
“… had its own self-jurisdiction, its own military force, its own general assemblies, its own traditions of struggles, glory, and independence, its own relations with other guilds of the same trade in other cities … When the town was called to arms, the guild appeared as a separate company, armed with its own arms … under its own self-elected commanders. It was, in a word, an independent unit of the federation.”
Consider the extreme difference between the mentality that motivated economic activity and ours today. Members were “driven by a morality quite unlike ours, notably because of the intense sense of camaraderie; the guild considers all its members as brothers and sisters.” Kropotkin refers to
“… the general brotherly feelings … the social duties of the brethren … If a brother’s house is burned, or he has lost his ship, or has suffered on a pilgrim’s voyage, all the brethren must come to his aid. If a brother falls dangerously ill, two brethren must keep watch by his bed till he is out of danger, and if he dies, the brethren must bury him … and follow him to the church and the grave. After his death they must provide for his children, if necessary; very often the widow becomes a sister to the guild.”
“… if a scarcity visited the city, all had to suffer from it more or less; but apart from the calamities, so long as the free cities existed no one could die in their midst from starvation, as is unhappily too often the case in our own times.”
“… it was the city itself which used to buy all food supplies for the use of the citizens. … the cargoes of subsistences … were purchased by certain civic officials in the name of the town, and then distributed in shares among the merchant burgesses, no one being allowed to buy wares landed in the port unless the municipal authorities refused to purchase them.”
Kropotkin argues that “These towns and guilds seem to have constituted a high point in the history of mutuality”, and that “the freedom from kings and lords that they ensured enabled the flourishing of great architectural and artistic achievement.”
In that era and situation ideas, values, dispositions and behaviour were powerfully collectivist. Whatever the drawbacks, if any, of the guild system might have been, it should leave no doubt that economic activity does not have to be driven by the miserably self-centred and greedy individualistic conception of human nature enshrined in conventional economic ideology.
This chapter has provided many reasons why capitalism is not just undesirable but distasteful and damaging. Many probably agree, but quietly accept it because they can’t see any better alternative. Chapter 2 explained that we have to find one, because capitalism is now clearly driving us towards catastrophic global collapse. In addition it forces you to work far more than is necessary, you have to fear unemployment, you are made to pay far too much for things like housing and other goods, you are obliged to pay out interest and rent to loafers who can avoid work, your landscape takes the form investors determine, you suffer insecurity of various forms, you have to struggle to survive, you probably do not live in a supportive community, you live in a predatory and dishonest and unjust economy—and as a result it is not surprising that most of us suffer some degree of anxiety and depression. None of this is necessary or unavoidable. All of it is due to a socio-economic system that is profit-driven, not needs-driven, which works in the interests of the capital-owning class. Chapter 10 explains an alternative that is workable and attractive, and could easily be built if enough of us wanted to build it.