The Blowback Against Facebook, Google and Amazon Is Just Beginning | Charles Hugh Smith: Of Two Minds

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“The theory of the happy union of capitalism and democracy rests on capitalism creating secure middle-class employment for millions of citizens. Once capitalism only creates a peon-debt-serf class and a 5% technocrat / manager / financier / entrepreneur / speculator class that harvests 70% of the wealth and income, then democracy dies by the slow poison of rising inequality and ever greater asymmetries of wealth and political power.”

Source: Charles Hugh Smith: The Blowback Against Facebook, Google and Amazon Is Just Beginning

Politics, my late grandfather used to say, makes for some mighty strange bed-fellows.

Capitalism was a logical ally for our American (and more generally, Western) representative democratic-republican system during the Cold War, when our enemies were based on a vicious combination of totalitarian political systems and state-controlled economies – and when capitalism was indeed creating secure middle-class employment for millions of citizens.

But this is no longer happening; indeed, quite the reverse. What we are seeing is increasing polarization into “haves” and “have-nots,” into wage-slaves and wealthy overseers. Which leads to the question, is today’s capitalism an ally of freedom, (representative) democracy, and self-determination, or yet another – and apparently voracious and implacable – adversary? At the least, as the above quote makes clear, democracy (or, as in the U.S., a Constitutional Republic) and capitalism are not always or necessarily allies.

This is true in part because of a difference in philosophy and ethos.

Capitalism is, at base, about competition and dominance: various companies, corporations, entrepreneurs, etc., are are in competition to attract consumers, acquire customers, and in the process, accrue wealth and the power that comes with it. Those entities that are most successful eventually dominate the marketplace, at least until a more successful competitor comes along and knocks them off their hill. People are viewed basically as units of production, consumers of goods and services – sources of either labour or money – or both.

Democracy, on the other hand – or again, more properly, representative republics (because a true popular democracy is perpetually dancing on the edge of demagoguery and dictatorship) – is about power-sharing, checks and balances, and the common good. While competition is not absent (particularly during campaign season!), a properly-functioning representative republic is more about cooperation than competition and dominance. People are viewed as citizens and members of society, with a common stake in the success of the enterprise.

Thus, both the methods and the aims of representative democratic–republicanism and those of capitalism – at least, in its current dominant form – are actually quite distinct. But it is also the case that not all forms of capitalism are created equal.

There is a great deal of difference between the kind of extreme crony capitalism, economic oligarchy, or corporate plutocracy in which neo-robber-barons like the aforementioned Google, Facebook, and Amazon are able, by their extreme wealth and the power that wealth purchases for them, to manipulate the machinery of democracy itself, and the capitalism of the Jeffersonian ideal, in which a nation of yeoman farmers, shopkeepers, craftsmen and artisans, merchants and tradesmen, working largely for themselves, own pieces of a widely distributed network of capital and means of production.

I have commented previously on the fact that the present, voraciously predatory form of capitalism is a relative latecomer to humankind, and even within the American experience: the massive shift that took place from the Antebellum (pre-War Between the States) period to the Gilded Age (from c. 11850 to just before the First World War) was a cataclysmic course-change, here in the U.S., from a culture and society in which most Americans worked for themselves (most of those on farms, the rest in the kind of Jeffersonian businesses I mentioned above) to one in which the vast majority of Americans worked for others, for wages.

The modern form of plutocratic capitalism is not the default form, for America – and furthermore, it is not, I think, healthy for any society.

The question, of course, is what can be done about the present crisis; and although the linked article points out – accurately, I think – that blowback is beginning, what form it will take, and what effect, it will have, remains to be seen. But that something needs to be done is, I think, an unavoidable conclusion; lest we end up governed by “Avatar”-style quasi-governmental administrative entities (QGAEs) that are accountable to no one – except, perhaps, their stockholders!

A full return to the Jeffersonian ideal is (sadly, in my opinion) probably pretty unrealistic, in today’s world. But something like Chestertonian distributism may be, as I have posited on more than one occasion, the only route to a system of economics which is human both in scale and in ethos. Every alternative I can think of is frightening.

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G.K. Chesterton on Capitalism

Chesterton on Capitalism

In which the wise G.K. Chesterton – called by some, and not without reason, “the apostle of common sense” – reminds us of a fact too-often overlooked, or intentionally ignored, by those on the conservative side of the political aisle: that while Capitalism may have been a useful counterweight to Communism when our battle was against large and aggressive Marxist / Leninist / Stalinist states, it is not therefore benign.

Let’s look at Chesterton’s observation again:

“It cannot be too often repeated that what destroyed the Family in the modern world was Capitalism. No doubt it might have been Communism, if Communism had ever had a chance, outside that semi-Mongolian wilderness where it actually flourishes. But so far as we are concerned, what has broken up households and encouraged divorces, and treated the old domestic virtues with more and more open contempt, is the epoch and power of Capitalism.

“It is Capitalism that has forced a moral feud and a commercial competition between the sexes; that has destroyed the influence of the parent in favor of the influence of the employer; that has driven men from their homes to look for jobs; that has forced them to live near their factories or their firms instead of near their families; and, above all, that has encouraged for commercial reasons, a parade of publicity and garish novelty, which is in its nature the death of all that was called dignity and modesty by our mothers and fathers.”

— G.K. Chesterton (1935)

Capital, of course, has always existed; and so has business, trade, and industry – were it only the forming of river-clay into pinch-pots, or the knapping of flint into stone knives and projectile points, or the tanning of animal hides: each of which some individuals could doubtless perform better than others, and consequently concentrated on, trading for necessities with others who could perform other tasks with greater felicity.

And it is doubtless the case that Capitalism may – kept within proper bounds – have a beneficial impact on freedom, by encouraging industry, frugality, initiative, enterprise, and like traits. These are advantages which should not be ignored, or minimized.

But the operative phrase is, “when kept within proper bounds”!

Our current situation vis-á-vis entities like Google and Facebook – which exercise a practical monopoly over our information-gathering and -sharing, strip us of our privacy (the idea that it is “with our consent” is meaningless if, as is too-often the case, it is impossible to use the service without giving our information, and there are no realistic alternatives available), and make it nigh to impossible for rivals to get off the ground, or to continue functioning if they do – should serve as a cautionary tale in that regard.

The truth is, Capitalism is just as much a modernist project as is Communism: it barely existed, for most of the population, prior to the Industrial Revolution, although its origins date back at least to the later Middle Ages.

In some ways the true rivalries in the later medieval period were not so much between feudal lords, or even those lordships-writ-large known as kingdoms, but between the feudal society itself – grounded in land, primarily agricultural land, and other forms of what was literally real estate, and the mercantile class of the growing towns, whose wealth and power was grounded in (you guessed it) liquid capital.

Nonetheless, Capitalism per se was a late development, being predicated on the concentration of wealth (e.g., capital) in the hands of a relatively few, who owned the means of production and hired workers to operate them:

“Although industry had existed prior to the [War Between the States, a.k.a. the U.S. “Civil War”], agriculture had represented the most significant portion of the American economy. After the war, beginning with the railroads, small businesses grew larger and larger. By the century’s end, the nation’s economy was dominated by a few, very powerful individuals. In 1850, most Americans worked for themselves. By 1900, most Americans worked for an employer” (U.S. History 36: The Gilded Age).

In 1850, prior to the War, about 64% of the U.S. population farmed – down from 72% in 1820. The majority of the rest would have been what we would nowadays would call “self-employed,” working in “cottage industries” or as small-scale tradesmen or merchants. Factories were few, and by modern standards, very small.

By 1920, under the impetus of increasing industrialization, the percentage of Americans who farmed had dropped to 30.2% (and by 1935, when Chesterton wrote the above observation, it had probably dropped further), although the overall population had exploded during that same time period, according to the New York Times. By 1987 only 2% (!) of the U.S. population lived on farms, meaning that an even smaller percentage actually worked them.

This is problematic for a number of reasons.

When a majority of the population farmed or worked in home-based businesses, both capital and the means of production were disbursed – distributed (cf. “Distributism“) among a much larger body of the population. Our present, highly imbalanced situation, in which (as of 2017) the wealthiest 1% of American households own 40% of the country’s wealth – and indeed the top 1% of households own more wealth than the bottom 90% combined! – did not exist.

But the effects were more than economic. In an economy in which the majority – and for the first century-plus of our nation’s existence, a vast majority – of the population farmed their own lands, or otherwise worked at home, there were a myriad of social implications, as well.

Both parents worked at home, and (as I used to teach the 6th-graders at the Outdoor School) it was more clearly a partnership, in which it was obvious that the efforts of everyone were of vital importance to the effective maintenance – indeed, survival – of the household. With the rise of the Industrial Revolution, “wage work” outside of the home gradually took on more (apparent) importance and cultural status than “women’s work,” or homemaking, back home. Inequality within the family grew, as the “wage-earner” was increasingly viewed as the one whose work “really mattered.”

In the earlier and more traditional model – the roots of which go back centuries, indeed millennia – children grew up as part of a family unit that was (barring catastrophe) intact, integrated, and holistic. They had both parents around, most of the time. And they learned what they would do when they took over the family farm (or cottage-industry business) by doing it: work was something everyone did together (granted that different people had different specialties), not just “something daddy does at the office, dear.”

Often several generations lived in the same house, or at least in close proximity to one another. The younger generations learned from the older, and in return, cared for them as they aged. You knew who you were descended from, and related to. Communities were smaller and more tightly-knit, as everyone helped everyone else with the harvest, barn-raisings, and similar events. Holidays were celebrated with gatherings and mutual visiting. There was a sense of continuity, cohesion, tradition.

Capitalism and industrialization proceeded hand-in-glove, and drove deep wedges between these traditional bonds: between men and women, between the generations, between families in a community, and between people and the land that supported them. It still does, of course, however distant and compartmentalized the relationship may be. But there is no longer the immediacy, the sense of relationship, of connection.

When Chesterton writes that Capitalism (and its handmaiden and enabler, industrialization – and nowadays, “high” technology)

“has broken up households and encouraged divorces, and treated the old domestic virtues with more and more open contempt… [It has] forced a moral feud and a commercial competition between the sexes… destroyed the influence of the parent in favor of the influence of the employer… driven men from their homes to look for jobs… forced them to live near their factories or their firms instead of near their families; and, above all, has encouraged for commercial reasons, a parade of publicity and garish novelty, which is in its nature the death of all that was called dignity and modesty by our mothers and fathers,”

he is speaking no more than the simple truth. Those of us who fall to the conservative side of the political spectrum, and especially those of us who consider ourselves to be in any sense traditionalists, should in my opinion (shared, I think I can confidently assert, by Chesterton) look with skepticism on Capitalism, holding it at arms length and partaking of its fruits only advisedly and with great caution.

It is, as I say, a modernist project, just as much as is Communism; it is, in its way, just as globalist and internationalist – and it is also just as centralizing in its tendencies, although its locus is the corporate élite, not the socialist state. Instead of a State monopoly on power, it leads to a Corporate monopoly on wealth; instead of apparatchiks, it breeds oligarchs. The choice between the two is, it seems to me, not unlike that between “the Devil and the deep blue sea!”


Nota Bene:  It may seem like all hope is lost, if Capitalism and Communism are the only two options, and they’re both toxic! Fortunately, there are other options, although they are under-appreciated, under-explored, and under-utilized. But they exist! For starters, check out

G.K. Chesterton’s Distributism

and

What is Southern Agrarianism?

Hopefully, once we begin to understand that there are alternatives to the Capitalism / Communism duality, we can begin to work towards enacting them…

Locally owned businesses can help communities thrive | Grist

Cities where small businesses account for a relatively large share of the economy have stronger social networks and more engaged citizens.

Source: Locally owned businesses can help communities thrive — and survive climate change | Grist

Let’s bracket out the “climate change” part of this, not because the climate isn’t changing – it is – but because intelligent people of good will can disagree on the extent to which those changes are anthropogenic (human-caused) and how much is due to natural cycles over which we have limited or no control. Obsessing over climate change can make enemies out of people who might otherwise be allies. Let’s just focus on doing the right thing, thereby generating positive, synergistic effects that will, in the main, benefit all of us, whether global warming is anthropogenic or not.

Case in point: I first ran across this article back in the dim and distant past (2013…), but the message is no less important, four years later! When I posted it on my Facebook account, I wrote, quoting the article,

“That there’s a connection between the ownership structure of our economy and the vitality of our democracy may sound a bit odd to modern ears. But this was an article of faith among 18th- and 19th-century Americans, who strictly limited the lifespan of corporations and enacted antitrust laws whose express aim was to protect democracy by maintaining an economy of small businesses.” Unfortunately, the bigger-is-better mindset of the 20th century blew this traditional American concept out of the water…

Indeed it did. And sadly so!

Our Founders – preeminently Thomas Jefferson, but others as well – were clear that the United States was intended to be a nation of smallholders: yeoman farmers, shopkeepers, tradesmen. They were staunch defenders of both private property and free enterprise, but having had to deal with the effects of oppression not only by the British Crown but by the East India Company, among others, they were understandably chary of giving corporations too much power. The kind of crony capitalism, corporatism, plutocracy and oligarchy we see today would, I am quite sure, have been anathema to them. Continue reading “Locally owned businesses can help communities thrive | Grist”