#003 Capitalism Critiqued
(Part Three of Four)

Moving on to the morality of capitalism, three main points can be identified which illuminate its ethical character. These points should be considered even more intrinsic and fundamental to capitalism, than its general tendencies, explored in part two, and are worth considering before we make a judgement as to whether or not or to what extent we should keep capitalism going forward.

First of all, capitalism notably limits the freedoms of the larger group, the workers, in contrast to the capitalist group. Under our current system, workers are largely separated from owning and controlling capital, so their freedom is limited to work of some form, to obtain enough money to live, or face poverty through the short supply and limited access to money, and therefore the things they want and need in life. Worker freedoms are limited in that, after electing work over absolute poverty as most people do, they still cannot simply choose any profession or industry to become involved in. Instead they can merely direct their education, normally from a young age, toward their chosen job/career path and then when the time comes, apply to any employer they wish (capitalist or state) with the hope of being offered a job close to one they desire. Whilst the worker is free to apply to any job, to accept any job offered or to quit and start the process again if they do not like their role, they must always accrue money to live, meaning they must always seek out and work for an employer, and unless they can gain access to capital in some other way (e.g. through loans or inheritance) and start a small business for themselves, they must join an organisation already in operation that is willing to take them on and pay them.

Freedom is limited both in that an individual must work a great deal, under the diktat of the state and/or capitalist elaborated upon in my second point, to live a poverty free life and an individual is only free in as far as another individual or company will agree to take him or her on as an employee, in other words an individual does not choose the job he or she gets, the individual chooses only to apply and the capitalist (or state representative) may or may not choose them.

This is not true freedom because true freedom implies autonomy of one’s self completely, rather than merely the opportunity to politely (in the form of an application) request a job and a wage (and hopefully a sense of fulfilment) from a more privileged class or elite. Added to which many studies show productivity and innovation, positive virtues in any socio-economic system, flourish most significantly under increased autonomy and freedom. If we are to accept true individual freedom, as a necessity of a moral & just social and economic system, then capitalism is problematic here.

Second, domination and servitude seems to be built into capitalism. The two groups with the social power and wealth, capitalists and the state, through owning capital, national or private, can effectively become the ‘boss’ of the worker group whether it be as an employer, owning the company where the worker works, and/or as a landlord, owning the house where the worker lives and rents. This in turn reinforces traits like conformity, unquestioning obedience, and compliance among workers and it reinforces in the capitalists (and state rep) the willingness to compete, dominate and patronise other people. Social hierarchy, social class and even corruption are the results, where people are judged primarily in accordance to how much money and/or property they can accrue, in how many people they professionally dominate (or manage) and how well they perform under capitalism (despite implicit unfairness’s starting off and throughout an individual’s life). A system, which naturally rewards and incentivises wholly self-centred and negative personal traits, is again a problematic, if not a flawed, one.

Third, and perhaps most crucially, exploitation [under the literal and primary Oxford Dictionary definition — “the fact or action of treating someone unfairly in order to benefit from their work”], lies at the heart of capitalism. Economically, all value is ultimately derived from people working, in one way or another. The means of production, distribution and exchange e.g. machines in a factory, lorries to distribute goods, even physical money itself used in trade, have all been created by people originally and so can only transfer value. This means all capital, and hence all value, is created by labour by people and then shuffled through the production process. With this in mind, if all workers were fairly compensated for the value they create and add there would be no leftover value for the capitalists of the world to utilise, meaning there would be no profits, no reinvestment, no expansion and no shareholder dividends. This is evidently not the case so where is this company & capitalist profit coming from?

It comes simply through the exploitation of worker by capitalist.


The system basically works through workers creating value through their work, and a capitalist entity paying them back only a portion of this value they have created, through wages in the form of money. The ‘surplus’ (the difference between what they produce and what they are paid back in wages) from all the workers collectively, is kept by the capitalist which, when manifested through the production process and money form, goes toward the company’s profits, allowing for businesses to grow, pay tax to the state, pay back debt to banks and so on, actually allowing the system as a whole to continue operating.

Exploitation then is fundamental to capitalism and explains how a capitalist can simply own a business, do nothing, and still make a healthy living from a portion of the businesses profits, whereas a worker, working day in and day out, for the same business on a low wage, can struggle to get by despite working hard for the company. Furthermore this exploitation will inevitably go as far as it can, without state intervention, to maximise the rate of exploitation and thus maximise profits and the extraction of value. This can be seen through the use of child labour, the use of unpaid internships & work experience (to substitute paid jobs, reducing company overheads and increasing profits) and general repression of wages to as low levels as possible, all things considered.

Also worth mentioning here is consumer exploitation, where a capitalist or group of capitalists exploit (capitalise on) a worker’s need for a resource or commodity, good examples of this are private companies owning energy, internet & water companies, corporations buying shares and running health services, landlords owning residential property and exploiting a tenant’s need for a home by charging them rent or perhaps the more explicit exploitation of the credit card and pay day loan company, with their high rates of interest, exploiting the worker’s need for money to survive.

A social system based on daily, global exploitation, is not only problematic but also fundamentally unfair and ethically flawed. On an absolute level, it is clear capitalism cannot claim to be (absolutely) ethical for the reasons above, however it is worth remembering, as many will point out, when compared with ethically inferior systems such as autocratic state capitalism (20th century communism), feudalism or slave/surf based socio-economic systems of time gone by, ethically capitalism can still be viewed as relatively more ethical in relative terms.

Moving on then, some argue capitalism is primarily justified in that it “facilitates” the production, distribution and exchange processes in all facets of life, meaning through capitalism we have profit generating companies that tie together people and their various needs.

This in practice means bringing together worker with a wage paying job, bring together client or consumer with goods & services and bringing physical capital together with human labour of some form, to produce a globally functioning economy and society. A company can for example, over time, build up a reputation, establish a brand and obtain and maintain contacts to facilitate the production process in an efficient, organised and large-scale manner — beyond that of a relatively socially isolated individual.

This argument extends further and asserts capitalists are in fact “job & wealth creators” who should be held in awe and viewed appreciatively (rather than disdainfully or disparagingly). This idea is often framed and perpetuated through mass media in this way for the purpose of strengthening popular belief in the current system, and even used by spokespeople for capital to justify millions of pounds of corporate tax avoidance, as in the case of Amazon UK in 2013 for instance.

Whilst the basis of this argument is logical, it is in no way a justification for capitalism. First of all capital (owned by capitalists) or land (owned by capitalist landlords) produces nothing on its own, it requires labour to be at all productive. Merely providing capital (allowing capital/land to be used) and thereby facilitating an economic process (primarily due to self interest) is simply not enough of an ethical justification for exploitation and is similarly not really worthy of reward, objectively speaking.
Simply put, if I own a hammer and I allow you to use the hammer in a job you undertake, that then doesn’t give me right to claim some of the value of your work. This only happens under private ownership and capitalism where the emphasis lies on the individual rather than the social collective. Even if I sold or rented you the hammer, I would merely be recouping money I put into purchasing it, which would in effect be merely transferring value, in the form of money, back to the builder of the hammer, who created the value through his or her labour.

Secondly there’s no reason to say the facilitation of production, distribution and exchange, bridging the gaps between worker, the work itself, the organisation, the means of production, goods, services, client and consumer, cannot be done efficiently, effectively and (crucially) fairly, outside of capitalism… In reality managers organise and “facilitate” the economy whilst owners only gain from it, through no work of their own. This is explicitly illustrated through the public stock market — where an individual can buy, own and extract value, in the form of dividends, from the productivity and hard work of people they may have never met let alone collaborated with in any kind of work environment.

So with regard to the moral character of capitalism - limited freedoms, the reinforcement of negative personal traits and human exploitation, are fundamental features, which the system has always held and will always hold by necessity!
It seems clear that these attributes are both largely abhorrent and negative for human society and exhibit an unfair and detrimental effect on many people’s lives in Britain and across the world. Equally, many of capitalism’s general tendencies are questionable and even its basic operational structure is overtly stratified and divided (despite Ed Miliband’s “One Nation” rhetoric).

It therefore seems fair to hold that the system of capitalism is a divided, archaic, unfair and ethically problematic social system at its very core. This means ‘baby-step’ reforms can only ever go so far and as long as we hang on to capitalism we will continue to see many of the major problems we see today. To avoid these problems and injustices in the future I think a whole new system is necessary, whether achieved by radical steps or revolution of a form, which improves upon capitalism in very significant and fundamental ways, this system, and the pursuit of this system, can be labelled post-capitalism

(Continued in Part Four)