FacebookTwitterGoogle+RedditEmail

Why Corporate Capitalism is Unsustainable

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.

More articles by:

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. 

Weekend Edition
April 20, 2018
Friday - Sunday
Paul Street
Ruling Class Operatives Say the Darndest Things: On Devils Known and Not
Conn Hallinan
The Great Game Comes to Syria
Jeffrey St. Clair
Roaming Charges: Mother of War
Andrew Levine
“How Come?” Questions
Doug Noble
A Tale of Two Atrocities: Douma and Gaza
Kenneth Surin
The Blight of Ukania
Howard Lisnoff
How James Comey Became the Strange New Hero of the Liberals
William Blum
Anti-Empire Report: Unseen Persons
Lawrence Davidson
Missiles Over Damascus
Patrick Cockburn
The Plight of the Yazidi of Afrin
Pete Dolack
Fooled Again? Trump Trade Policy Elevates Corporate Power
Stan Cox
For Climate Mobilization, Look to 1960s Vietnam Before Turning to 1940s America
William Hawes
Global Weirding
Dan Glazebrook
World War is Still in the Cards
Nick Pemberton
In Defense of Cardi B: Beyond Bourgeois PC Culture
Ishmael Reed
Hollywood’s Last Days?
Peter Certo
There Was Nothing Humanitarian About Our Strikes on Syria
Dean Baker
China’s “Currency Devaluation Game”
Ann Garrison
Why Don’t We All Vote to Commit International Crimes?
LEJ Rachell
The Baddest Black Power Artist You Never Heard Of
Lawrence Ware
All Hell Broke Out in Oklahoma
Franklin Lamb
Tehran’s Syria: Lebanon Colonization Project is Collapsing
Donny Swanson
Janus v. AFSCME: What’s It All About?
Will Podmore
Brexit and the Windrush Britons
Brian Saady
Boehner’s Marijuana Lobbying is Symptomatic of Special-Interest Problem
Julian Vigo
Google’s Delisting and Censorship of Information
Patrick Walker
Political Dynamite: Poor People’s Campaign and the Movement for a People’s Party
Fred Gardner
Medical Board to MDs: Emphasize Dangers of Marijuana
Rob Seimetz
We Must Stand In Solidarity With Eric Reid
Missy Comley Beattie
Remembering Barbara Bush
Wim Laven
Teaching Peace in a Time of Hate
Thomas Knapp
Freedom is Winning in the Encryption Arms Race
Mir Alikhan
There Won’t be Peace in Afghanistan Until There’s Peace in Kashmir
Robert Koehler
Playing War in Syria
Tamara Pearson
US Shootings: Gun Industry Killing More People Overseas
John Feffer
Trump’s Trade War is About Trump Not China
Morris Pearl
Why the Census Shouldn’t Ask About Citizenship
Ralph Nader
Bill Curry on the Move against Public Corruption
Josh Hoxie
Five Tax Myths Debunked
Leslie Mullin
Democratic Space in Adverse Times: Milestone at Haiti’s University of the Aristide Foundation
Louis Proyect
Syria and Neo-McCarthyism
Dean Baker
Finance 202 Meets Economics 101
Abel Cohen
Forget Gun Control, Try Bullet Control
Robert Fantina
“Damascus Time:” An Iranian Movie
David Yearsley
Bach and Taxes
FacebookTwitterGoogle+RedditEmail