When competition arises to the status quo of Capitalism, namely an arrangement of production that the workers find preferable and more profitable for themselves, the tools and means of production are seized by decree of government, and sold off to the highest bidder, or participation becomes a criminal offence. By way of copyright, assets, patents, contracts, private property and various other means, the Capitalist market requires the use of state violence to protect its assets and interests, and likewise the state requires a well-managed Capitalist market to keep the productive activities of workers under its control, always to the material enrichment of those who are already rich. This is done by the magic of rent, interest and other forms of unearned income: People who already hold a claim to material wealth are further rewarded for their already-existing wealth. The state and the bourgeoisie (the class that holds the private property and money in an economy) arrange a mutually beneficial arrangement, and what's good for the goose becomes good for the gander.
A paradox arises: The state increasingly becomes involved in the surveillance and management of citizens, while it facilitates, to the fullest possible extent, the freedom and power of "corporations," and shields them from any accountability for their actions, legal or otherwise. Taxes are levied on the workers and returned to their masters as subsidies. Historical prejudices and social barriers are done away with, but only so far as it allows previously oppressed peoples to enter the labour market as indentured worker-consumers like everyone else—oppressive structures of power which do not threaten the flow of capitalist’s money are perpetuated and reinforced. Governments of countries which had existed outside of the Capitalist paradigm quickly "formalise" their economies, snapping up land and resources which were previously held in common by the people that used them, privatising these lands, destroying old livelihoods and forcing their own peoples into a choice of Capitalist enrichment or starvation. In this way, the Capitalist way of doing things is maintained and advanced.
One thing (amongst many) that is unique about this modern age is the extent to which the capital and the state-backed rights of private property over much of the World’s human and natural resources has aggregated into the hands of a few extraordinarily rich individuals. So powerful have they become that it is almost impossible to tell where the Capitalist class ends and the political class begins; business magnates and their paid lackeys populate the halls of parliament in every nation-state, where the underlying current that dictates all policy-making is ultimately the unyielding belief that the Capitalist market must always be growing, growing, growing without end, and that unlimited consumption and extraction of the Earth’s materials must go on forever no matter what, and that most importantly, all the riches of the Earth must, by the hands of their wretched workers, flow ultimately upwards and back into their hands of the rich Capitalists.Conversely, the role of the state and the multinational corporation has become increasingly blurred. National borders, in order to ease the flow of labour and more importantly capital, have become of increasingly less significance, whilst the “private” domain of the Capitalist class expands into what was once the public sphere of land and activity, being guarded by high walls, obedient guards and constant surveillance. Entire islands and swaths of land are sold as parcels to the highest bidder. Soldiers are replaced with autonomous drones and private contractors. Likewise, public services and land are increasingly privatised, and massive corporations have even started providing amenities and basic needs such as housing to their wage workers in place of any public body which would (at least in name) be held accountable to those who work to really run such functions (the workers) and those depend on it (also the workers).
It is this contradiction that makes Anarchists believe that the state cannot provide the solution to the gross and preventable injustice of this world. A so-called “democratic” state will always be caught between the demands of its voting citizens versus the reality that it depends on the threat of violence and the prioritisation of some over others so to keep itself alive. It must, at the end of the day, rely on physical force to control the creative force of its citizens in order to sustain itself, and to restrict their freedoms. The thirst for power, as soon as it’s quenched, returns and returns again, always growing beyond any limit. States exist to perpetuate themselves. Even countries dominated by Social Democratic policies are reliant upon the injustices of the monopoly of violence, of borders, of hierarchy, of wage work, of constantly growing consumption, and many more to stay alive. Attempts to “redistribute wealth” and to protect citizens against the machinery of Capitalism are simply fixes applied after the fact. They can’t change the inherent injustice within the system, and must inevitably give way to Capitalism’s demand for the ceaseless devaluation of life and labour.
Money cannot and will not stand still. It is never enough that a private company “should make enough” —if it is not expanding it is on its way to eventual death. It is likewise for “macro” (regional or national) economies: If the GDP is not expanding and the state economy is not “growing” (consuming more and more resources), everything falls apart. Businesses close, working people lose their livelihoods, wages are cut, safety nets, labour laws and environmental protections are dropped in an effort to “cut through the red tape,” all for the sake of bringing back “capital” via investments. GDP must grow, more and more money must enter into the economy and every resource must be used up eventually. There must be constant expansion of capital into spaces where it was not before: into rainforests and the oceans, into hospitals and libraries. It has to always find new ways to reproduce itself, forever. Businesses must always be expanding their revenue. And when we combine this with the fact that it is easier to get money when you already have (lots, and lots, and lots) of it, we can see why oligopolies and wealth disparities are not just an unfortunate side effect but the end result of Capitalism. It’s not just the hoarding of money that’s a problem but the need for a constant flow of it.
When capital runs out of things to invest itself into (such as new factories, jobs, technology and so on), it must find new ways of reproducing itself. We are currently in the middle of a severe ongoing crisis, which lead up to, culminated in, and outlives the Great Recession. Shortly after World War 2, the whole world (near enough) was open to capital investments: Newly opened up countries in Europe, Africa and Asia meant that capital, mainly from American companies, could flow outward, and new factories and infrastructure could be built, new resources could be extracted, new jobs could be made, and new Capitalist markets could emerge (with a little help from local politicians and generals, of course). In the USA, the automobile had created a whole host of industries to be built up from the ground: roads, motels, fast food restaurants, garages, factories, et cetera. The world was ripe for Capitalist expansion, and for workers, the getting was good. But we no longer live in that time. Most of the World is already “flush with capital” investments from years gone by. Roads have been built, consumer technology is in every home (to different degrees) even in the poorest of countries, and the planet is reaching its limit for exploitation. Every industry is now dominated by a handful of multinational corporations who have no real interest of out-performing each other, since this would bring the whole house down (think Mutually Assured Destruction).
This weird crisis was pointed point by Karl Marx in the 19th Century, and he described it as “the tendency of the rate of profits to fall.” Because of this tendency, and the need for money to be constantly flowing, Capitalism has started to eat itself. Wages have been falling for decades, and mega corporations are now investing almost all of their money in buybacks of their own stock rather than R&D or investment. All this is done to increase profit margins since we are running out of “investment outputs”—places and industries for markets to grow and money to be made. As a result of this need to keep on making money when there are no real opportunities to make anything of value, we have seen something even weirder—the explosion of the financial industry. We now have two economies, the “real economy” of actual goods and services, and the and the “financial,” or “phantom economy.” This phantom economy is the world of pure capital—markets of derivatives, futures and securities, where money can be made from more money while producing absolutely nothing of real value to humans. The Capitalist class is not putting its money into investments in return for profits, but rather loans for the purpose of collecting interest. There is a paradox here. As profit margins are made ever larger at the cost of wages for the sake of preventing the “growth” of GDP from going kaput, the very rich are pouring their money not into actual jobs, but into “financial instruments” where the money can flow indefinitely and reproduce itself, and where returns from lending must grow and grow without end. Of course, this is not possible, and the 2008 financial crisis was a consequence of this irresponsible borrowing and lending. And yet, despite its relative detachment from the “real economy,” capital still must maintain a link to real goods and services if people are to still operate under a wage system. Here is the crux of the problem: Despite contributing nothing, not even in capital investment (never mind actual labour), Capitalists must control people’s access to all goods in order for them to actually work. The wage system (paying workers a fraction of the value that they produce), by the way of money, binds the workers who produce real things of value to the entire Capitalist system. On top of this, the Capitalist class, by way of “buying” things, is able to maintain claim to properties that it is most likely not even using, such as houses for speculation (buying low and holding on until they can sell high), restricting the access of the people who made such goods and actually need them.
As you can see, Capitalism does not derive its dynamic, all-consuming qualities from so-called “human nature.” The very way that capital exists and functions dictates totally the way that whole societies and economies must operate. It is called “Capitalism” for a reason. On a purely pragmatic level, a rich person would have limited use of so much physical wealth in real goods, but a capitalist can obtain near infinite use out of millions or billions of dollars, and what’s worse, because they have invested this money in risky loans and competing firms, they are compelled to accumulate even more, and must seek new and novel ways of doing so, regardless of their effects upon others.
A common talking point from supporters of Capitalism is that Socialist organisations can exist happily under Capitalism, whereas the Capitalist way of doing things must be suppressed where Socialism dominates. This is not true. Ignoring the wealth of examples in history of powerful Capitalist governments doing everything in their power to crush different forms of Socialism, let’s look (for example) at the problem that a worker-owned cooperative would face: In order to acquire the tools and land in order to begin its life, it must borrow money and pay back in interest much more than what it was given, sacrificing what it produces to Capitalists in the process. It must pay rent to idle landlords, again sacrificing produce. In order to trade with other firms, it must exist in a competitive market where it must either constantly expand beyond its original state or face extinction. Workers can’t just produce what they need or want, they have to make extra goods or services in order to sell them for capital. Mutual aid and an exchange of goods for the mutual benefit of everyone involved is replaced by a competitive means of exchange where both parties try to “do each other over,” since the act of trade itself is how the Capitalist owners make a profit. Since the cooperative must fit into the Capitalist mould in order to operate in the Capitalist market, its entire operation is forced into becoming an exercise in producing profit and acquiring more and more money, and workers must either work in excess or take a hit to their own livelihoods in order to do so and survive.
All of this is only possible because of money, or “capital.” It alone makes it possible to accumulate wealth in such huge amounts, and to create the inequality we see today. It is by using capital that people can hold onto real goods—in amounts far beyond any practical use—such as houses, water sources, and food, and it is the logic of accumulating capital that motivates people to hold onto these things and even destroy them in order to drive up prices. Under different forms of mutual aid such as a barter system (where goods are exchanged like-for-like) or form of Communism (where goods are shared freely), people may be greedy and tend to horde, but it is only capital that enhances the ease with which people hoard and the exaggerates their motivation do so, to such an extent that it threatens the wellbeing of life on this planet.
What Is to Be Done?The only solution, as far as the Anarchist is concerned, is to pull ourselves totally out of the established way of doing things. History, so far as it is the history of great nation-states, has nothing to teach us except in failure. Every Socialist state that has tried to resist the domination of Capitalism has eventually become the opposite side of the same coin. They have tried to emulate all of the privileges and luxuries of a Capitalist state but without any of the undesirable aspects; state Socialism is the diet cola of ideology.
If we are really serious about breaking out of how things are, Anarchism poses some very troubling questions: What does it mean to be truly free? Can people have their desires and needs met outside of a system of constant material growth for the sake of growth? Who owns the Earth and who is entitled to our labour? There are many more questions as well, and the fact is that every self-described Anarchist has a different idea of what such a label means. But perhaps—and I don’t pretend to be any kind of authority on this—one idea that defines Anarchism is the idea that the fruits of the Earth belong to those who labour for them. No legal fiction will ever give legitimacy to any claim to private profit or taxation on workers. To those who would see this idea as a call for selfishness and believe that state force is necessary to provide for the most vulnerable, I would say this: A welfare state is only functional so long as it can depend on the goodwill of its most powerful—how is that any better? Humans, I believe, are generally social creatures who recognise that the freedom and happiness of one depends on the same for others. On top of this, the greed of the individual worker over their own work could in no way ever cause so much severe and widespread inequality and poverty as an entire economic or legal system that enables a tiny minority of people to claim property over wealth beyond imagination. The connection that we have to any resource is based on our actual occupancy of it. Anything beyond that is a work of fiction. The only viable solution to the question of how work can be done that respects this idea is the free association and collaboration of people who are not compelled by the threat of starvation or violence into work that is both physically and mentally harmful. That is to say, people working together to create real value for themselves and each other, freely sharing what they can, and cooperating and exchanging necessities—this can be done immediately on a personal level, and on a regional or even global scale by way of federations of free individuals. A real working example of this, if only short-lived, was seen in Anarchist Spain, and pockets of such association are necessary even for a Capitalist system to function.
It is obvious to anyone who doesn’t have their head in the sand that a complete and total change of life on this planet is coming, and nothing can stop it. Climate change, perpetual war, depleting natural resources, nuclear proliferation, antibiotic resistance and more all promise us the end of the world as we know it. The question is not if, not even when, but how. If things continue as they are, the near future will bring about a world where only the very rich and their children will have anything close to lives worth living. There is no point in beating around the bush here—“Humanity” has failed and failed again since the catastrophe of the world wars to learn anything, and now we are due for something equally disastrous if not more so. If there is any chance of the human species pulling itself out of this cycle of destruction (if such a thing is even possible), we will have to drastically change everything.