Reaction 2 for ECO/SOC 935

One of the most important takeaways from the assigned materials, in my opinion, is the realization that our current economical structure cannot endure forever. Both capitalism and communism have been destined to fail since their inception. Communism simply happened to fail first. Because of this, the people’s erroneous interpretation is that capitalist ways will endure forever. The driving forces of capitalism, such as the corporations that benefit from it, definitely want people to believe that “perpetual growth is the rational and achievable goal of national economies” (Heinberg), since this had been the general idea so far.

Separation of land from the theoretical primary ingredients of the economy (labor, land and capital) in the 19th and 20th c. led to neglect the fact that land is finite. Yet, natural resources cannot be substituted by some other form of capital. “The human condition exists within, and entirely depends upon Nature” (Heinberg), and thus ignoring this fact will lead to grave problems, as we are now soberly realizing. Yale University scholar Immanuel Wallerstein states in his book World Systems Analysis that “We are in the capitalist system when the system gives priority to the endless accumulation of capital … Endless accumulation is quite a simple concept: It means that people and firms are accumulating capital in order to accumulate still more capital, a process that is continual and endless” (qtd. in Mander 10). In other words, the capitalist system depends on continuous growth and expansion, but since the inputs, i.e. the natural resources are not endless, the growth and expansion will eventually grind to a halt.

Mander says that capitalism is amoral. Capitalism’s sole purpose is the development of individual and corporate wealth. “It has no other job, and no interest in ‘right or wrong,’ or human welfare, or communities, or in the well-being of the natural world, except as resources for itself” (Mander 14-15). The Four Horsemen film proves Mander’s point by denouncing banks of forming a “criminal conspiracy” to charge more interests on loans to the Blacks and Hispanics. Banks lobbied successfully against States’ legislature that prescribed prosecution in cases of racial lending. Their goal was to open the way to lending and charging more to minorities. This specific fact has particularly intrigued me. I know that businesses cannot discriminate between races when hiring new employees. Insurance and healthcare providers are also controlled against redlining. So my question is how could those banks ultimately reverse the law pretending to help minorities while going after their limited resources and not get exposed and punished?

Another point Mander makes is that capitalism is intrinsically inequitable. I tend to agree with this assertion, because I have seen some of the disparity between poverty in the midst of affluence. Mander states that “the central function of capitalism is to help people with wealth to seek more wealth and greater dominance; the separation between rich and non-rich within countries and among them inevitably becomes steadily greater” (15). The Four Horsemen film proves this notion as well. Now, this coming part surprised me, for I never thought regular banks could do this kind of thing. The film points out that banks actually create money through lending. They then have the money to speculate prices. Finally, when people at the bottom of the financial pyramid need to buy something, they must go back to the banks to receive loans, and the vicious circle starts over. This is also the reason why the top-down approach does not always work: “by the time the money reaches the people at the bottom of our money pyramid, it has lost its purchasing power.” (Four Horsemen film)

Finally, Mander believes that capitalism undermines democracy. “The system has an intrinsic need to dominate and undermine democracy, and also public consciousness, so as to control its rules, benefit more easily, and advance its primary self-interest: expanding growth, profit, and wealth” (Mander 15). I can understand his point of view, because there are some clear instances in which the government favors big corporations’ interests over the people’s welfare. One unambiguous example is the huge bailout of 2008, which was voted against by 80% of the American population, but, since it was favorable to many corporations, was carried out anyway (Four Horsemen film). In essence, there is “socialism for the rich and capitalism for the poor” as the Four Horsemen film sharply puts it. So, big corporations wish to operate in the free market when times are good for them, but are quick to demand government subsidies when they risk bankruptcy. This reflects the previously stated idea that capitalism controls the rules in order to benefit with more ease. Additionally, the Four Horsemen film stated that the corporations buy their way by employing an average of five lobbyists per congress person, something the less affluent cannot ever afford.

Works Cited

Heinberg, Richard. The End of Growth. Gabriola Island: New Society Publishers, 2011. Web excerpt retrieved from: http://www.postcarbon.org/article/159540-economics-for-the-hurried-part

Mander, Jerry. The Capitalism Papers: Fatal Flaws of an Obsolete System. Berkley: Counterpoint, 2012. Print.

Olin Wright, Erick, and Joel Rogers. American Society: How it Really Works. New York: Norton, 2011. Print.

The Four Horsemen. Dir. Ross Ashcroft. Guerrilla Films, 2012. Retreived from: https://www.youtube.com/watch?v=5fbvquHSPJU

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