The Flaw in the System

Recent global events have demonstrated that we live within a system that is simply not designed with any capacity for resilience. After only a brief pause in productivity, the entire mechanism of capitalism has been brought to its knees, and is begging to be rescued by the kind and generous people of nations in which its companies reside. At the direction of their governments, via taxation, of course.

The capitalist system is the ultimate in hypocrisy; simultaneously demanding of the population that they rely only upon themselves as sole provider, whilst requiring assistance when things do not go the way that any given corporation might intend. Over the last decade or so, we have seen bailouts for the automotive industry, banks, and insurers. Of course, there is a delicious irony in the idea that the hyper-capitalist banking industry has been the recipient of the greatest amount of public cash. It seems that in the most capitalist nations, where socialism is but a dirty word uttered only behind closed doors between individuals considered to be part of some kind of liberal conspiracy to destroy the planet, individuals are seen as social pariahs for seeking public assistance in bad times, yet companies may dip their hand in the public pot as and when required.

But back to recent global events.

The Great Productivity Pause (as I would like it to be known) has thrown the world travel industry into some kind of terminal downward spiral, and now governments are considering throwing billions at airlines in order to keep them afloat, and reopening hotels regardless of the Covid-19 threat level. What’s a few thousand additional deaths here and there if it ensures CEOs and shareholders receive their payments?

Most recently, the retail giant Intu has collapsed into administration, just as our government in the UK has decided that we should be encouraged to go out and spend, spend, spend in order to keep our wonderful capitalist economy going. We are assured of an economic bounce-back! Hurrah! Everything is going to be fine. Do not worry about a second wave of Covid-19; just make sure that our shops do not go bankrupt.

Intu is not a retailer itself, but an owner of large shopping complexes – temples of retail in which people sacrifice their paycheques upon the alter of useless trinkets. Yet, since the early 2000s slowdown, and the 2007 global recession, customers have been less faithful to their gods. Spending in retail stores has seen sharp declines, and in turn, the high rents they were able to pay in exchange for locations with heavy footfall has diminished. As such, the revenue potential for these giants of retail landlording has been equally suppressed, whilst their costs have remained. Therefore, haemorrhaging money, they have had no option other than to place themselves into administration.

Although this may seem like a recent problem, the economic slowdown that has resulted from the Covid-19 crisis is only a symptom of a much bigger problem. Capitalism itself.

The goal of capitalism is, as its name suggests, the acquisition of capital. This is done by producing goods and providing services to consumers, at a profit. This profit is used to produce more goods and provide more services to consumers, at a profit. This profit is used… you get the picture.

In order to create a profit, goods must be produced at the minimum possible cost, and sold at the maximum possible price. In the past, this system worked relatively well. However, with the advent of the industrial revolution, all that began to change. It has become less and less necessary to keep humans in the production loop. Goods produced by machines can be created at a far lower cost, far more consistently, and can be sold at a greater profit.

But isn’t this good for the consumer?

Well, for the short-termists, yes. But if you consider the greater consequences, you see that capitalism has a fundamental flaw when it comes to profit-maximisation. To explain this, we will consider a generic example.

A company produces kitchenware for the mass market. It sells lots of units and makes a great profit. However, a new machine comes along that is able to take the place of the humans in the factory who produce those plates and cups and dishes and other things. So, the business owner buys the machine and produces the same items at a lesser cost, selling them for the same price to the market. The business owner gets richer. Yay! Capitsalism is working.

But what about those workers who no longer have jobs? How do they access the market without the capital that they had previously earned from producing those kitchenware items? They must get another job elsewhere, either producing some other good, selling it, or providing a service. However, in reentering the labour market, they have increased the supply of labour, driving down the cost that they are able to charge for their service.

Repeat this across several companies, or several hundred companies, or several thousand companies, and you have replicated the situation within large and complex economies across the world. Labour costs are constantly driven down by increased supply until a significant portion of the population simply cannot afford the goods that are produced within the market of which they are a part.

So, you have a population that cannot afford the goods that are produced, so companies seek to drive down their production costs yet further, implementing further cost-cutting measures in order to drive their unit prices down. Yet this puts further individuals out of work and back into the labour supply, and the situation becomes gradually worse.

Eventually, a tipping-point is reached at which nobody can afford said goods, and the company is no longer selling units in order to make its profits. Where does it turn? To the government of its nation, who bails it out with public money. Where does this money come from? The public, via taxation. Or printing money. Both of which lead to the same devastating problem; inflation. And so the value of the capital owned by every person within the market is diminished. Not such an issue for those with plenty of spare capacity, but a potentially life-threatening problem for those on the edge of financial survival. And of course, as the supply of labour increases, and the cost of labour decreases, and the value of the money in circulation is reduced, more people are pushed towards that line of financial destitution.

Yet, we exist within this system, which self-protects at all costs. It continues to devalue money in order to perpetuate the inexorable march toward the endgame, at which the majority of people will no longer have the capital available to sustain the market.

So what does this have to do with Intu? Well, it is an example of what happens when the population does not have the capital to sustain the system around it. Managed protection of the system may delay the inevitable, but at some point in the future, the Intus of this world will become so numerous that systemic failure will become inevitable.

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Wonder, Wealth, and Sacrifice

When Hernán Cortés first set foot in the Aztec capital city of Tenochtitlan on the 8th of November, 1519, he must have truly believed he had entered a city of the gods. What must he have thought of the majestic expanse of urbanity that eclipsed the largest European cities? A city as populous as Paris, London, Florence, and Milan combined, with gleaming skyscrapers of stone, must have appeared as alien to that Spanish invader as a city floating in the sky would to modern humans. As he walked down wide boulevards lined with gold and tumbaga, he must have doubted just for a moment that European sense of superiority that drove his mission of conversion and conquest. Surely he wondered, as he gazed up at the Templo Mayor, what history had brought these people to this point? How could this culture have so effectively terraformed the land around them so that it might provide for their every need, when back home even the construction of a simple canal was a monumental undertaking? This must have seemed to Cortés, even if just for the briefest of moments, as the most advanced civilisation in the world.

But of course, this magic spell could not have lasted. Gunpowder, horses, and biological warfare in the form of smallpox made swift work of bringing this beautiful culture to its end, and the Spanish inherited its wealth in less than two years.

But peeling back the majesty and wonder of the Aztecs for just a moment, we see a far more brutal society. I am, of course, talking of human sacrifice. For the Aztec, and the Maya before them, human sacrifice was a practice built in to every day life. It was not just meaningless murder, either. Aztec culture believed that the existence of the universe was dependent upon the continued and sustained sacrifice of the gods, who provided the conditions for life to continue. Human sacrifice was a reflection of this practice, and a way in which humanity itself could thank the gods, by relieving a little of the burden upon them. It was, in essence, considered as an absolute necessity for life to carry on, and for society to function. Without it, civilisation would collapse, and the great cities, and skyscrapers, and temples would fall into the earth and the Aztec would be no more.

Of course, this was seen as a horrifically barbaric cultural practice by the Spanish, who moved quickly to outlaw the practice. The Aztec were taught that their religion was wrong, and that Catholicism was correct, and that God loved them, and that suicide was a sin, and the practice was ended.

Human sacrifice was not limited to the Aztec and the Maya; countless civilisations have practiced it throughout history, either secretly or overtly. The Ancient Egyptians, Greeks, Carthaginians, Romans, Celts, Chinese, Japanese, Mongols, Israelites, Vikings, Nazca, Inca, Indians, and almost anywhere you care to look have at some point throughout history indulged in the practice, usually as a quasi-religious metaphor in order to ensure the continuation of society by pleasing and thanking the gods, or to attempt to improve the health of a person or people. Giving the life of another human being is the ultimate sacrifice, and usually it was done only as an absolute necessity, when no other loss would suffice.

These cultures have now ended, and their rituals lost to the depths of time. This surely demonstrates the futility of wasting life for the purpose of continuing a societal system.

Which brings me to the present day.

We live in strange times. Capitalism is supposed to be a system of opportunity, in which the poor are able, through struggle and strife, to work their way into wealth. Yet we reached a stage of capitalism in which those who are born poor are likely to remain that way throughout their lives, and those who are wealthy are likely to see their resources grow indefinitely. Of course, there are exceptions to this rule, and they are held as shining examples of what can be achieved. This of course conveniently leaves out the enormous quantities of luck required, and the infinitely small probability of doing so. Furthermore, we regularly turn a blind-eye to the harm that our economic system is doing the world around us; in a form of collective suicide we are causing the conditions for a slow species extinction.

Regularly, we are told by those who have made their fortunes through the capitalist system of how fortunate we are to be ‘free’; that we live in relative comfort, and that we have never had life so easy. We are reminded of how many died for the failed experiments in socialism, communism, and other ‘isms’ throughout history, and that capitalism would never tolerate such barbarism.

Yet if this is true, in a world where all but a handful of nations are paid-up members of the global capitalist club, why are more than eight hundred million human beings undernourished? Why, when we have individuals sitting on piles of wealth that they could not possibly spend in a thousand lifetimes and whose capital continues to grow, do people starve to death, or lack basic medical care? Why are thousands of tons of food disposed of in landfill, when children go hungry at night?

Of course, everybody believes they are exempt from this system; nobody wishes to believe they are part of such a cruel machine. But the truth is that we are all caught up in the intrinsic self-preservation of this way of life. Every time we buy a new car, or television, or novelty clock, we are perpetuating a system in which resources are taken away from those most in need, and funneled slowly but inexorably wealthwards to those dragons sat upon on their mounds of gold. But, you may be thinking, what on earth this has to do with human sacrifice?

At no time in the modern world has the fragility of the capitalist system been more apparent than during the current Covid-19 crisis. After only the briefest of moments in which the world stopped working, economies around the world were on their knees, with systems on the verge of collapse. Of course, nations initially shut down their workforces in order to preserve life, but when it became apparent that the capitalist economy could not sustain extended closure, talk immediately turned to how best to restart the fires of industry.

Whilst the probability of a person dying of Covid-19 is low, it is significant enough that the world was closed-down for weeks if not months. Yet now, when capitalism is on its knees, human beings are being told to go back out into the world, and risk their life in order to preserve the system.

Is a system which requires humans to die in order for it to survive worth preserving? Covid-19 has not fundamentally changed anything, it simply created an extreme in which the limits were tested. In doing so, it highlighted what was already there to see, had we all looked; humans have being dying for capitalism since its inception, from lack of food, shelter, warmth, and medical care. It is a system whereby many do win, but in order for that to happen, many must lose. And in this case, losing often means dying. When one truly stops to consider it, there is a morbid hilarity in the knowledge that the combined resources of the wealthiest three individuals on earth could end poverty and hunger, yet instead they choose to compete over who can build the coolest space ship.

Human beings are being sacrificed upon the high alter of capitalism, which makes us no less barbaric than those past civilisations whom we so much enjoy patronising for their simplistic beliefs.

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