Here’s a tiny question: Why does it feel like everything’s collapsing?
The common thread running through all the world’s problems is predatory capitalism, my friends. It’s what links climate change, inequality, stagnation, mass extinction, and so on. Capitalism’s the global economic model that America exported around the globe, and built a global economy of and for. And now global capitalism is collapsing. Yes, really. Everywhere you look — into nationalism, extremism, fascism, from America itself, to China, to India, and beyond.
So why did global capitalism fail? I want to try in this little essay to put the reason as simply and clearly as possible.
Let’s begin with the obvious and visible problems of climate change and mass extinction. What do they really mean, in hard economic terms? Well, something like this. The world’s animals, plants, trees, water, and air were turned into money. “Capitalized”, if you like. So much so that we the planet’s climate was destabilized, and human beings triggered the first mass extinction for a geological age. We ripped through the bees, birds, fish, oceans — and turned them into money. We literally “made money” out of them — some of us, anyways.
So…what happened to all the money that all those extinct species and felled forests and poisoned rivers were “made” ”into? Where did it go?
The money that the world’s rivers and mountains and animals were turned into now belongs, mostly, to the ultra rich. Global capitalism, over the last thirty years or so, produced a new class of ultra rich — once, a mere doctor or lawyer used to be a millionaire, and that was “rich.” Today, the “owner” of a power grid or healthcare system or technology is ultra rich — he is “worth” billions, not just a mere million or ten. Capitalism concentrates wealth and power — and so yesterday’s merely rich became today’s ultra-rich, whether America’s megacapitalists, China’s tycoons, or India’s techno-industralists.
Where did the world’s forests, trees, rivers, and animals go? They are sitting in the bank accounts of the ultra rich, my friends. But which form are they better off in — as dead numbers, bits in bank accounts, or as living things? Which form are they more useful to democracy, the future, humanity, and the planet all in? What was the point of “making money” out of the whole living world around us?
The problem with people becoming so unimaginably wealthy is that there is literally nothing to do with all that money. Nothing. There are not enough megamansions and superyachts and mistresses in all the world to spend it on. And so the money…is just sitting there. Where, precisely? Well, it can’t sit in obvious places, where it would be taxed. So it’s shunted and shoved offshore. By some estimate, a quarter of the global economy consists of “offshore funds.”
None of that is so different from pirates burying looted treasure — but looted treasure might have come from one mine or two, one town or two, one robbed ship or three. Capitalism’s buried treasure has come from a whole looted, destoyed, savaged world, climate, and planet. So the trillions of dollars…that are also the animals, plants, oceans, rivers, and trees that we have ripped through…that the entire world was turned into…are buried away where no one will ever find them…where no can ever use them…because they are “owned” by a tiny number of ultra rich.
What the? Do you see how weird and upside down all this is? Surreal and bizarre is an understatement. Now here’s the question. If all that money is just sitting there — doing precisely nothing — then…what on God’s green earth was the point of destroying all those things to “make” it in the first place?
Do you see the problem? It is what economists call a “deadweight loss.” The living world, the planet, the climate — all these things were torn apart…by capitalism…so the rich became the ultra rich…and filled their coffers so high…the money literally couldn’t be counted…and was simply buried away like treasure. We tore the world and planet apart for…nothing, in other words. Capitalism in this sense didn’t create any real value — it was an exploitative and predatory system, with literally no lasting or enduring use to society, people, or the future.
(It’s true, in a weak sense, that, as American pundits love to point out, “Chinese and Indians got richer!” So what? That only proves my point. We didn’t need to tear the world apart to do it…because the bulk of the “money” that was “made” out of oceans, trees, forests, animals… is just sitting there pointlessly doing nothing anyways.)
Now. What happened as all this “capital” was concentrated at the very top, making the rich the ultra rich, who then buried it all in hidden places?
(Skip the next few paragraphs if you want to get to the point.
Well, inequality skyrocketed. In society after society that signed up global capitalism — India, China, Britain, Australia — the result was a startling rise in inequality. Sure, people were getting nominally “richer” — but that missed the point. A yawning gap was opening up. American economists who touted the “new middle class” missed the point. The newfound wealth of these societies wasn’t being shared fairly — or even sanely. The vast majority of it was going to the ultra rich, who just shoved it away in hiding places. But why would it have been shared fairly? If “wealth” was being earned by tearing apart the planet and the world in the first place, in a predatory way…why would it be shared?
What was the point — again — of capitalism tearing apart the rivers, trees, mountains, and oceans apart, to “make money”, to literally turn them into money — when that money didn’t equate to more capital for societies, just for a tiny few ultra rich…who couldn’t use it to begin with?
As a result, inequality began to destablize capitalism’s bellwether societies — America, India, China, Australia. People understood they were being exploited by the system — and demanded more, a bigger share. A backlash grew in all these societies. In America, it took the form of white supremacist, aka fascism. In China, a new kind technological fascism emerged. In India, hyper nationalism surged. What was really happening was this.
As capitalism grew ever more predatory, society began to experience severe shortages of capital. The American middle class’s incomes stopped growing in the 1970s. Britain’s, in the 2000s. In China and India, incomes didn’t keep pace with costs of living. That meant that people couldn’t save, invest, accumulate, own. Middle classes stopped growing — in America and Britain, they imploded — and where they did “grow”, like India and China, they were middle classes only in name: they enjoyed no stability, security, safety, because they were unable to establish a position of basic financial well-being. Life never became any easier — just more anxious, wearying, desperate, and precarious, no matter how nominally “rich” one got.
As capital stopped flowing through society, there was less left over to invest in public goods. When the average person was seeing a declining share of a nation’s income, then of course there was little left over to tax and invest in things like healthcare systems, retirement systems, parental leave, safety nets of all kinds. As a result, global capitalism meant that it’s bellwether societies — America, India, China, Britain — all failed to develop public goods. Living standards stagnated, because public goods underpin advances in the quality of life.
Because the way that global capitalism created “efficiency” and “productivity” was to work people harder and harder — for an ever smaller share of what they created — capitalism’s bellwether societies never matured into stable, sophisticated democracies, either. India and China stalled in every aspect of progress towards human rights, protections, guarantees, safeties — while Britain and America went into regress.)
Now. I said I’d put why capitalism has failed as clearly as I possibly could. Let me put it this way.
Capitalism had taken all the things that existence had given it for “free” — oceans, trees, rivers, animals, insects, you, me — and “made money” out of them, literally: it had transformed them into money. Paper. Numbers. Bits. Ranks, orders, decimal places. It had “capitalized” them. Those forests and rivers and trees and animals were the things which were really “traded” on “stock markets” and “bonds” and “currencies”, the things represented, really, by every dollar bill.
And yet no economist had asked the crucial question — because most of them couldn’t think beyond capitalism, could barely think at all, in fact — what had the point of this transformation — turning the world into money — been?
The fact was that there had been little real point to this transformation. It hadn’t yielded any of the following things: democracy, equality, freedom, justice, or progress. It had cost exactly those things, in fact — because the point of the game was taking the planet, world, globe, turning it into money…and giving all that money to an increasingly tiny few…rewarding them for being predators…not sharing it with everyone, to begin with. (But how could you “share” the very things you were taking from people to begin with — the skies, oceans, rivers, forests…their creativity, passion, intellect, talent? See the paradox?)
Hence, in net terms, capitalism was a failure: it had ripped apart the globe and planet, turned everything on it and it, into “money” — but that money had no point whatsoever. It was useless. Even the ultra rich had so much of it that they couldn’t possibly use it, so they just buried it — and what they had they would never put to use in genuinely beneficial ways, because they were, well capitalists. Catch-22.
Capitalism had consumed the world…for nothing. Precisely nothing, literally nothing, absolutely nothing. For no good reason, purpose, or end whatsoever.
(Hence, that void — that nothing — came to define an age. People felt nothing, because they had nothing — not enough money, no community, no society, no point, no purpose. Democracy fell apart, because nothing meant anything. Nothing was all that left in the wake of a capitalism that had never had a point — no decency, no humanity, no truth, no beauty, no future, no history, no reality. Nothing came to define everything. And so, naturally, fascism, authoritarianism, and extremism arose in nation after nation.)
Let me make all that crystal clear and utterly concrete.
Capitalism’s transformation of the climate, planet, and globe into “money”, hadn’t, for example, been used to give every child on planet earth an education. Every poor person an income. Every elderly and frail and ill person healthcare. Every newborn child a roof to sleep under. Each and every life the resources they needed to flourish, grow, and develop. It hadn’t been used to answer the big questions, where do we go, where did we come from, or to voyage to the stars.
It had just destroyed the climate, planet, and globe for no good reason whatsoever — except to make a tiny few richer. Yet they couldn’t even use the riches they had piled up. So there had been no point to capitalism’s transformation of the climate, planet, and globe into capital…at all.
Capitalism was hard to understand, conceptualize, understand, for precisely that reason. What kind of a thing turns things to…nothing? There is nothing else like that in all the universe. Even black holes emit light and gravity. Capitalism was something truly incomprehensible: a thing which transformed things into…nothing.
Capitalism wasn’t like the water that nourished the garden. It wasn’t even like the flood that fed the seeds. It wasn’t even like the fire that renewed the soil. It was something inhuman, something truly alien. It was a thing which turning things, living things, things of meaning, beauty, truth, grace — into nothing. Nothing at all. All those things which humanity treasured and cherished were turned into money…no one could use..which was buried…just to “own” it forever.
But the ugly truth was this. To meet the great and noble challenges that marked humanity’s transformation to becoming a mature species — give every child an education, every sick person healthcare, to develop a global democracy of nations, and so on — humanity didn’t need to chop down all the forests and drain all the oceans of fish and pollute the skies. It just needed to build hospitals and schools and universities, and create teachers and doctors and professors and nurses. It didn’t take destroying the globe, planet, and world to meet humanity’s challenges. In fact, it took nourishing them — because medicine and knowledge and sanity and air and water and freedom and equality came from all those things.
That, though — “the provision of public goods”, as American economist called it — or what you and might just call “people investing in their common wealth together”…is precisely what capitalism would never let it do…because it was “socialism.” And so humanity didn’t develop in that direction. It just went on transforming things into nothing, for no reason whatsoever — because that is what capitalism does.
What happened in the end, by the mid 21st century or so?
Humanity had destroyed its home, all the gifts it had been given, the waters of life, the air it breathed — for nothing. Nothing at all. Not even anything useful for the super-rich — because they, remember, had just buried all that money. All that money…doing nothing…accomplishing nothing…was what humanity’s shared birthright had been destroyed and turned into. Humanity had taken miracles, and turned them into worthless bits of paper. It had taken wonder and beauty and majesty and mystery — and turned them into worthless coins, buried deep in the very dead soil they were made of. It had taken the green and the blue and the living, the skies and the sands and the oceans…and made them…nothing. Literally…nothing.
It had thought — believing capitalism’s foolish lies — that it was turning lead into gold. Performing a kind of techno-financial alchemy. But in fact humanity was transforming the greatest things of all — life, grace, being, knowing…into…nothing. It was making the animals and oceans and trees and air into literally…nothing. Nothing at all. It might as well as have just burned them and shredded them and evaporated them. Turned them to dust. Because that is what it had really been doing.
What, after all, was the point of turning all the things in the world into…money…that was buried and hidden away after it was piled up…turning into rust…because no one, not even it’s “owners”, could use it anyways? And yet humanity didn’t have a word for a thing which turned things into nothing. So far, such a thing hadn’t existed at all. Humanity had created it. But could it uncreate it?
Yet that was capitalism’s greatest failure of all. To turn miracles into dust. To turn things of wonder and grace and beauty into…nothing. Capitalism was a kind of death machine, the thinkers of the next age finally understood: a system that took all that was alive, and made it more dead, just so that a tiny few could feel powerful, rich, supreme. But humanity wouldn’t learn the lesson for another century or so. And by then, some said, it might just be too late.
Umair
August 2019