The Capitalism Delusion

Item #1: A CEO, a worker and an immigrant go into a pub. On the bar is a tray of twenty pints. The CEO removes one pint and places it on the bar and takes the rest of the tray. He turns to the worker and says “You’d better be careful that immigrant doesn’t steal your drink.”

Item #2: I was slumped on the sofa after work yesterday vaguely watching an ancient episode of The Simpsons when an advert for the TENTH anniversary special of Keeping Up With The Kardashians came on the television. This family of talentless nobodies are multimillionaires and have done nothing of any merit in a decade of relentless exposure.

Ladies and gentlemen, I give you the delusion of hypercapitalism in all its 21st century glory.This post is not an attack on capitalism per se. It is an attack on certain aspects of the hypercapitalism that has taken hold in much of the English-speaking world in the last couple of decades. I think that capitalism is probably the best way of organising a modern economy and I am certainly not a Corbynista. However, I do believe that some parts of the UK economy need to be taken back into public ownership – the utilities and railways in particular. In the case of the railways I would implement renationalisation without compensation to the likes of Richard Branson who have delivered an extremely poor service whilst pocketing vast sums in public subsidies. At the same time I think there is some truth in the aphorism “There’s no such thing as a free lunch” popularised by economist Milton Freedman; someone has to earn the money Jeremy Corbyn and John McDonnell want to redistribute.

One of the great lies that has taken hold in the English-speaking world is that tax cuts for the wealthiest will lead to economic growth that benefits all. The Cambridge economist Ha-Joon Chang dismisses this myth…

“Once you realise that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are – a simple upward redistribution of income, rather than a way to make all of us richer, as we were told.” 

The wealthy are no better or worse than the rest of us, they simply want to maximise the benefits coming their way. We already live in a plutocracy in the West (rule by the rich) and now our societies increasingly resemble a plutonomy – an economy where the benefits of economic growth are restricted to a wealthy few. But just as plutocracy is bad for democracy, plutonomy is economically illiterate. I have argued elsewhere – in a post I called The $22,000 Fidget Spinner – that I believe that the hyper rich simply waste the excessive resources they have cornered. There was a reason Henry Ford paid his workers $5 a day in pre-First World War America. It wasn’t because Ford was a benevolent and charitable individual (quite the reverse, he was an vicious anti-Semite who was called an “inspiration” by Adolf Hitler) but because he knew his well-paid workers would be able to buy his cars. It is far better for the economy to have a lot of people spending modest amounts of money on necessities than a few vastly wealthy people wasting money on solid gold fidget spinners.

This also helps to explain the return of some deeply unpleasant nativist sentiments to the politics of the West. The fact that the buffoon in the White House is completely unqualified for the job he holds is less important than the fact that he is a billionaire. The vastly wealthy do not want ordinary working people to realise they have more in common with each other than with the rich people who steal a ludicrously disproportionate share of the fruits of the economy. Donald Trump’s rhetoric about immigrants is designed to disguise the fact that an American worker on the minimum wage has much more in common with a Mexican immigrant than with the CEO who has crushed his union and driven down his wages to near-poverty levels.

The mad cult of identity politics is part of this ongoing war on working people and their interests. It is no secret that most of the apostles of identity politics are minted – they are doing very nicely out of the current economic arrangements thank you very much. The current sound-and-fury about same sex marriage in Australia distracts from the fact that the economy has been tanking since the end of the mining boom and that housing is becoming unaffordable in most capital cities.The racist drivelings of transgender “model” Munroe Bergdorf have been given far more coverage in the British press than the fact that McDonalds UK CEO Steve Easterbrook “earned” £11.9million in 2016 whilst the majority of his employees are on the UK National Living Wage of £7.50 for workers aged 25 and over and £7.05 for those aged 21 to 24. Which is more important I ask – obscenely low wages for millions of working people or the toileting arrangements of a few thousand transgender people?

The odious and multi-talentless Kardashian clan are merely a symptom of a broken economic system that gives vast rewards to a tiny minority whilst ensuring that most people are caught up in endless competition for the ever-diminishing crumbs that fall from the plutocrats’ table. I ask who is the greater parasite on the US economy – Kim Kardashian living in luxury that would seem ostentatious to the Emperor Caligula or a Mexican immigrant working two or three jobs to provide for his family?

Time for a maximum wage and a universal income.