Why is capitalism failing us?

Doug Page at Dissident Voice asks this in a thoughtful essay detailing the flaws of capitalism. The elite make the money, the workers get shafted, and overproduction leads to economic downturns. Standard Marxist theory, really, even if Page doesn’t appear to be Marxist. He ends by proposing that the only way to fight the State is to, among other things, “stop our consumption of the products of the elite” and “grow our own food and meet our own needs.”

Um, Page seems well-meaning and genuinely searching for answers, but unless you want to go live in a yurt in the wilderness, you will need to purchase the products of capitalism. It is folly to pretend otherwise.

A hardcore Marxist would say the State needs to own the means of production, with the workers running things. Then, with foresighted planning, everything will run smoothly and there will be no overproduction, no boom-bust economy, no shafted workers. This sounds good in theory too, but tell me, why would a group of workers necessarily be any more competent in running a factory than a capitalist? Or any less less susceptible to corruption and the emergence of a new ruling class?

Another problem with Marxist theory is that it seemingly always talks about factories. The workers will run the factories. Well, in Marx’s time,  all they had was factories. But times have changed. Microsoft and Google are not factories, they can move production anywhere quite easily and – I’m just guessing here now – most of their workers probably don’t feel particularly exploited. Especially not the early ones who are multi-millionaires thanks to their stock options. So tell me, who has Bill Gates exploited?

Marxist theory has some valuable thoughts, but it needs to be updated and brought into the 21st century else it will be seen by most, especially in the US, as a dusty relic.


  1. Ask not why capitalism has failed us, but rather why have we failed capitalism. Adam Smith recognized the role of a strong central government to (1) regulate markets where necessary, (2) provide progressive taxation so that wealth does not accumulate excessively at the top, and (3) provide those essentials like education and infrastructiure (and these days one might add health insurance) that the market cannot effectively provide. Smith also recognized the need for a strong moral principle underlying the capitalist system. He would be appalled at the current equating of “self-interest” with “greed.”

    Our economic system today little resembles capitalism. We have rebelled against taxation, deregulated markets, and elected leaders that failed to provide the essentials a government should. As business has globalized, we have rebelled against giving up national sovereignty, allowing the ultra-wealthy to evade control by any government. But above all, we have forgotten that self-interest means at a minimum that our neighbor ought not to be so poor that he/she needs to steal from us in order to survive.

    Capitalism has its failings–but it also has the advantage of harnessing (rather than denying) humankind’s desire to excel. But if we are to return to a capitalist system, we would need two major changes: (1) a government larger than the economy; in other words, either global government or a return to national/local economies– and only the former would have the ability to implement progressive taxation that would move wealth from the filthy rich (us) to the poverty-stricken majority, and (2) a mass awakening of consciousness that the wellbeing of others affects our own wellbeing.

    Personally, I don’t see either condition happening in my lifetime. Welcome to the Age of Anarchy.

  2. An emerging problem with both capitalism and socialism is that they need a strong central government to function efficiently and fairly, but in the coming 4gw world, what we’re getting is the hollowing out of governments instead.

  3. Adam Smith also recognized the need for a competent central govt., a thing voters have been persuaded is an evil entity … over the past 30 (make that 40) years our skills at home and abroad have become ‘hollow’ … relying more and more on always limited police and military might. Fault the so-called wisdom of the so-called common people who bought into voodoo economics and pie-in-the-sky big brotherism – not evil government, but an absentee Father whose children have run amoke.

  4. Also, I’m not sure that what is being “practised” currently is Capitalism, but a form of corporatism, where government contracts-out every sort of service to the private sector under this misconceived notion that the private sector does it better, which in the case of the handling of the war in Iraq, through the contracting out of fringe services (such as food preparation and laundry handling) to Haliburton, KBR and others have demonstrated otherwise.

    With the current seriousness of the economic downturn, however, I believe that the public will be a bit (emphasis on “a bit”) more critical of big business, which might present opportunities for radical, progressive change. The challenge, however, is whether or not our government will have the guts or the audacity to fulfill the desires of its people.

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