FacebookTwitterGoogle+RedditEmail

Why Corporate Capitalism is Unsustainable

by KEVIN CARSON

I’m not a Marxist, but I find a lot of Marx’s ideas useful. Old Karl certainly had a gift for turning a phrase. Nobody who could come up with something as Proudhonian as “the associated producers” could be all bad. One of his best in my opinion was that new productive forces eventually “become incompatible with their capitalist integument,” at which point “the integument is burst asunder.”

Another source of vivid imagery is the Preamble to the Constitution of the Industrial Workers of the World. Consider this:  “… we are forming the structure of the new society within the shell of the old.”

These two phrases brilliantly describe the predicament of state-fostered corporate capitalism. Capitalism as an historic system is five hundred or more years old, and the state was intimately involved in its formation and its ongoing preservation from the very beginning. But the state has been far more involved, if such a thing is possible, in the model of corporate capitalism that’s prevailed over the past 150 years. The corporate titans that dominate our economic and political life could hardly survive for a year without the continuing intervention of the state in the market to sustain them through subsidies and monopoly protections.

This system is reaching its limits of sustainability. Here are some reasons why:

1) The monopolies on which it depends are increasingly unenforceable. Especially “intellectual property.”

1a) Copyright-based industry has already lost the fight to end file-sharing.

1b) Industrial patents are only enforceable when oligopoly industry, oligopoly retail chains reduce transaction cost of enforcement — unenforceable against neighborhood garage factories using pirated CAD/CAM files.

2) Cheap production tools and soil-efficient horticulture are

2a) increasing competition from self-employment

2b) reducing profitable investment opportunities for surplus capital and destroying direct rate of profit (DROP)

3) State-subsidized production inputs leads to geometrically increasing demand for those inputs, outstripping the state’s ability to supply and driving it into chronic fiscal crisis. For centuries the state has provided large-scale capitalist agribusiness with privileged access to land stolen from the laboring classes. For 150 years, it has subsidized inputs like railroads, airports and highways for long-distance shipping, and irrigation water for factory farming. But as any student of Microecon 101 could tell you, subsidizing something means more and more of it gets consumed. So you get agribusiness that’s inefficient in its use of land and water, and industry that achieves false economies of scale by producing for artificially large market areas. Each year it takes a larger government subsidy to keep this business model profitable.

4) Worsening tendencies toward overaccumulation and stagnation increase the amount of chronic deficit spending necessary for Keynesian aggregate demand management, also worsening the fiscal crisis. The state has built a massive military-industrial complex and created entire other industries at state expense to absorb excess investment capital and overcome the system’s tendency toward surplus production and surplus capital, and sustained larger and larger deficits, just to prevent the collapse that otherwise would have already occurred.

In short, capitalism depends on ever-growing amounts of state intervention in the market for its survival, and the system is hitting the point where the teat runs dry.

The result is a system in which governments and corporations are increasingly hollowed out. And meanwhile, growing up within this corporate capitalist “integument,” things like open source software and culture, open-source industrial design, permaculture and low-overhead garage micromanufacturing eat the corporate-state economy alive. An ever-growing share of labor and production are disappearing into relocalized resilient economies, self-employment, worker cooperatives and the informal and household economy. In the end, they will skeletonize the corporate dinosaurs like a swarm of piranha.

Kevin Carson is a research associate at the Center for a Stateless Society. his written work includes Studies in Mutualist Political Economy, Organization Theory: An Individualist Anarchist Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online.

Kevin Carson is a senior fellow of the Center for a Stateless Society (c4ss.org) and holds the Center’s Karl Hess Chair in Social Theory. He is a mutualist and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: A Libertarian Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. 

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
May 26, 2017
Friday - Sunday
Anthony DiMaggio
Swamp Politics, Trump Style: “Russiagate” Diverts From the Real White House Scandals
Paul Street
It’s Not Gonna Be Okay: the Nauseating Nothingness of Neoliberal Capitalist and Professional Class Politics
Jeffrey St. Clair
The ICEmen Cometh
Ron Jacobs
The Deep State is the State
Pete Dolack
Why Pence Might be Even Worse Than Trump
Patrick Cockburn
We Know What Inspired the Manchester Attack, We Just Won’t Admit It
Thomas Powell
The Dirty Secret of the Korean War
Mark Ashwill
The Fat Lady Finally Sings: Bob Kerrey Quietly Resigns from Fulbright University Vietnam Leadership Position
John Davis
Beyond Hope
Uri Avnery
The Visitation: Trump in Israel
Ralph Nader
The Left/Right Challenge to the Failed “War on Drugs”
Traci Yoder
Free Speech on Campus: a Critical Analysis
Dave Lindorff
Beware the Supporter Scorned: Upstate New York Trump Voters Hit Hard in President’s Proposed 2018 Budget
Daniel Read
“Sickening Cowardice”: Now More Than Ever, Britain’s Theresa May Must be Held to Account on the Plight of Yemen’s Children
Ana Portnoy
Before the Gates: Puerto Rico’s First Bankruptcy Trial
M. Reza Behnam
Rethinking Iran’s Terrorism Designation
Brian Cloughley
Ukraine and the NATO Military Alliance
Josh Hoxie
Pain as a Policy Choice
David Macaray
Stephen Hawking Needs to Keep His Mouth Shut
Ramzy Baroud
Fear as an Obstacle to Peace: Why Are Israelis So Afraid?
Kathleen Wallace
The Bilious Incongruity of Trump’s Toilet
Seth Sandronsky
Temping Now
Alan Barber – Dean Baker
Blue Collar Blues: Manufacturing Falls in Indiana, Ohio and Pennsylvania in April
Jill Richardson
Saving America’s Great Places
Richard Lawless
Are Credit Rating Agencies America’s Secret Fifth Column?
Louis Proyect
Venezuela Reconsidered
Murray Dobbin
The NDP’s Singh and Ashton: Flash Versus Vision
Ron Leighton
Endarkenment: Postmodernism, Identity Politics, and the Attack on Free Speech
Anthony Papa
Drug War Victim: Oklahoma’s Larry Yarbrough to be Freed after 23 Years in Prison
Rev. John Dear
A Call to Mobilize the Nation Over the Next 18 Months
Yves Engler
Why Anti-Zionism and Anti-Jewish Prejudice Have to Do With Each Other
Ish Mishra
Political Underworld and Adventure Journalism
Binoy Kampmark
Roger Moore in Bondage
Rob Seimetz
Measuring Manhoods
Edward Curtin
Sorry, You’re Not Invited
Vern Loomis
Winning the Lottery is a State of Mind
Charles R. Larson
Review: Mary V. Dearborn’s “Ernest Hemingway”
David Yearsley
The Ethos of Mayfest
May 25, 2017
Jennifer Matsui
The Rise of the Alt-Center
Michael Hudson
Another Housing Bubble?
Robert Fisk
Trump Meets the New Leader of the Secular World, Pope Francis
John Laforge
Draft Treaty Banning Nuclear Weapons Unveiled
Benjamin Dangl
Trump’s Budget Expands War on the Backs of America’s Poor
Alice Donovan
US-Led Air Strikes Killed Record Number of Civilians in Syria
Andrew Moss
The Meaning of Trump’s Wall
FacebookTwitterGoogle+RedditEmail