The Basic Problem With Capitalism – It No Longer Exists


The degree to which we can’t imagine anything but capitalism is shown in science fiction where even when humans are posited as not existing, the system somehow contrives to be capitalist in any case.

The problem is, our own capitalsm is largely fantasy at this point, for the simple reason that capital as a whole is in a money-losing situation, the economy is decapitalizing at a phenomenally fast and accelerating rate. Successful new companies are successful only to the extent that they decapitalize an industry, and the capitalization of the new player is always substantially less than the amount of decapitalization that occurred.

Sure, companies have been disruptive of markets in the past, but only to consolidate their own value, leading to an eventual increase in capitalization. That’s no longer the case, since the disruptive new companies are as vulnerable to new disruptions as the old were (and in fact the “old’ are often no more than a few years old themselves). The result has been a flight of investment from capitalist, wage-good industries to real estate as rentier property and a consequent magnitudes greater increase in the value of real estate over the value of capital.

The instability of the financial system has a number of root causes, but one of the main ones being that when the US dollar became the de facto base currency in the 1950s it represented about 52% of the world’s currency, and as such made a compelling reserve. Today it represents about 11% of the world’s currency, which is not sufficient for it to act as a stable reserve against anything but the most minor and localized issues in the global system.

The question remains though: what does currency actually represent? A related question: what is a US dollar actually worth? It can’t be expressed in other currencies, since they use the US dollar as the base to calculate the worth of those currencies, nor can we jump back to the gold standard (ridiculous as it is conceptually) since even gold is valued in US dollars. The US dollar can’t fail without taking out the entire financial system worldwide, yet every projection (including those of the right wing) project its failure within the next 5 years.

If, as it appears, the US dollar is worth whatever people believe it is worth, there is a further issue. People are losing their belief in currency at a rate almost as rapid as the flight of investment to rentier property, largely because technology has undone the substantialization of currency that supported that belief since Roman times. I can go a month and not see a single instance of currency – I’m remunerated for my work by the digits in my account being credited from the digits in the company account, I pay for things by debiting that account with a card, my accomodation costs and most of my bills are automatically debited from that account without me having to so much as use my card. The bank which accomplishes these credits and debits is an intentionally inefficient server farm, and that server farm is old and obsolete, and I can run exact parallel simulations of what the entire Canadian banking system accomplishes without even straining two Sun servers that I paid $250 each for used.  Within a decade, or two at most, whatever the equivalent of today’s iPhone turns otut to be will likely be ale to run the global financial system.

Exchange, trade, is absolutely necessary, you could even say it’s the basic sense of life, since metabolism itself is exchange. Currency (which today means the entire edifice of the global financial system) is not. It’s merely a means of making it more convenient. But as the “grease” of exchange, currency is old and clogged, and the arteries of exchange are needing more than minor stents.

Capitalism was a temporary solution to a temporary issue, one that was dependent on a set of simultaeneous factors unlikely to ever happen again. But we’re going to need some creative imagination to come up with something better. And  we may need it sooner rather than later, because if this system goes, as nearly every projection shows it will, there will be no way to reconstitute it.

Those who are considered “creative, imaginative”, are also often considered “prescient” by the public, as if they somehow can predict future trends beyond the limited degree to which human beings can actually predict anything futural. This includes not only artists and philosophers, but engineers and other technologists and scientists proper (not “researchers”, who occupy approximately the same relation to scientists as factory workers do to engineers).  Of course this is not truly the case, the romantic “cult of the genius” is no more than that.  In general though people understand reality as they were introduced to it, by people who understand reality largely as they were introduced to it.  Though the average understanding changes over generations, it does so primarily as the work of the people listed above disseminates and modifies previous understandings. Yet simply by existing, each generation changes reality from the reality of their parents and grandparents.  As Wyndham Lewis put it, each generation only understands the reality they have in fact destroyed.  \

Due to the nature of the work involved as an artist, social critic, philosopher, scientist, technologist, etc. though the requirement to pay attention to reality as it is, and to modify the understanding where it diverges from evidential experience, to a certain degree forces those people into a more direct understanding of reality as it currently is, rather than how it was.  As a result their understanding appears to the rest of the public to be a generation or more “ahead of its time”, whereas it is precisely of its time, while their is of previous generations’ time.  \

As a society, we need these people more now than ever, yet we have so far failed to understand what they do and what they produce, and to provide any reasonable means of compensating them for it.  They don’t simply work, and thus renting their “intellectual labour” is a completely inappropriate way of dealing with them, rather they produce works.  To fully understand the difference one has to understand the difference between a work and a thing, but suffiice it to say that modern technology itself is a work, as is any particular technology.  Technology as a whole, as a work, enables the enframing of other things, which includes human beings themselves, as interchangeable resources. Yet any particular technology is itself not an interchangeable resource, but a unique work.  Instances of that technology may be identical and perfectly interchangeable, but as a work the original is not. But to compensate for the production of a work requires that work to be judged as to its worth.

At the very time they are most needed, the creative and imaginative among us are being treated by society as a whole as close to worthless, expected to either give their work away, or to have it valued as “intellectual property” (when it is neither intellectual nor property for the most part) and compensated via copyright laws that are written with no understanding of the nature of a work.

While this only affected a small number of artists, writers, academics, scientists etc. little could be done about the situation, it simply was accepted as the stereotype of the “starving artist”, but as technologies such as 3D printing decline rapidly in cost, “things” that were not previously interminably reproducible at little to no cost are becoming equivalent to the already easily reproducible writing, music, design and other works, assuming the original work exists, i.e. has been produced as a work.  Those whose basic telos of their labour is the production of works start to become the largest segment of the labour world that is actually productive.

The stress involved in such production under current conditions leads to the rather absurd reality that software developers, as a convenient example, have a shorter career expectation than soccer players – the average software developer has a career length of less than seven and a half years.  Someone with five years experience as a software developer is considered a “senior” developer in an industry that takes longer than most to really develop top notch skills, which seems perverse in the extreme.

Simply, though, software developers, like other engineers and technologists, tend to have less of a vocation than fine artists, scientists and others that have historically produced works rather than simply providing interchangeable labour, and the industry has tended to be incapable of attracting creative, imaginative individuals, although those qualities are among the most important in becoming good at the role and at maintaining one’s sanity through the inherent stress that comes with the fact that every work has to be functional.  It has to work.  This low career expectation has led to fewer new university students applying to that area each year, in fact the number has dropped every year for the past 35, even though it is one of the few industries that can provide at least a reasonable living wage.  Every year an industry that for the most part needs more people gets less, something that can only partly made up for by importing skilled people from other countries.

This is of course reflected in other roles that produce works to a greater or lesser degree.  Admitting the dissolution of capitalism is a necessary first step, since “capital” is both less available and less necessary in promoting creative, imaginative, innovative works.  This leaves the out of proportion reward to capitalists who support successful ventures as something that is no longer necessary nor desirable.  Recognizing that production of wage-goods, particularly those that are produced at little to no cost (which will always result in a low to nonexistent price) is no longer even close to providing the total wages necessary to both purchase said wage-goods and to pay the exponentially increasing cost of rentier property is a necessary second step.  Things may not go in a sensible order, though, since the collapse of the financial system, if it occurs, would instantly change the entire situation.  Without a financial system those who are “wealthy” would no longer bewealthy, while those whose wealth was in the form of “real” property (i.e. real estate) would have no means of keeping that property nor any means of earning income from it.  At that point we, as a society, will have to decide, almost from a zero point, what is worth what, what is necessary, and what is plentiful versus what is scarce.  The plentiful consists in what can be reproduced from an original work for little to no cost.  The truly scarce are those who have the ability to produce such original works.

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