We Can Do Better Than Markets: A Philosophical Critique

Imagine that you decide to go on a camping trip with a group of friends. Each member of the group is tasked with bringing some items that are essential for the group to use for the camping trip to be a success, and each member does exactly this. During the camping trip, some fish while others cook, and some prepare tents for sleeping while others tend to the fire. One day during the trip, Amy, a member of the group, finds a wild apple tree full of luscious apples and decides to claim it for herself as private property. When the rest of the group members reach the tree, Amy decides she will not allow any of her group to have access to the tree, but instead she will sell the apples for a personal gain. In a different scenario, imagine that John, another member of the group, also decides that he will charge other members of the group an hourly rate to use his knife.

Most of us will instantly recognize that intuitively there is something ethically wrong there, and that the group members breached a presumed egalitarian moral code where much of the property, tools, and personal assignments are democratically and collectively managed to maximize the interests of all group members instead of one over another. This paraphrased hypothetical was drawn up as a thought experiment by philosopher G. A. Cohen as a critique against capitalism/markets, and John and Amy’s thinking form the central behavioral schema of how markets work in our capitalist society. The point of the thought experiment is not necessarily to imply that all of society should function like a camping trip, but rather that the egoistic exchanges which John and Amy offered, exchanges of the kind that dominate everyday markets, do not present a moral ideal for us, and that we have moral inconsistencies about how we think people ought to behave in regards to property.

A camping trip signifies something more than just what people like to do for fun. It is a social arrangement where people temporarily have very different moral outlooks on property.

A camping trip signifies something more than just what people like to do for fun. It is a social arrangement where people temporarily have very different moral outlooks on property.

This consequently brings us to our first possible critique of markets, and that is that they intrinsically function as selfish or egoistic exchanges. Consider the common tug of war between a car salesman and the typical buyer, a tug of war that will always remains as such, with neither party considering the interests of the other. In this market exchange, the salesman desires to sell the car at the highest possible price, while the buyer wants the exact opposite. The salesman would sell the car at ten times the average price if he could or even completely empty the pockets of the buyer if there was a way to persuade the buyer to accept such an expensive deal. At the opposite end, the buyer desires a car for the cheapest price possible, and would not mind buying the car for $10 if the salesman offered such a hot deal. The nature of this market exchange, connected more deeply to the profit maximization behavior of capitalism, ensures that there is always a behavior of extreme self-interest in both parties, causing them to care only for themselves and never for one another, a self-interest just like that of John’s and Amy’s in the camping trip thought experiment.

Not only do markets promote a culture of selfishness, they also promote a culture of distorted and illusory values where a commodity is socially valued only from the fact that it exists within this logic of market exchange, our second critique. This second argument is part of Karl Marx’s theory of commodity fetishism, a theory he first expounded in his influential work Capital. The illusion that commodity fetishism creates is that the commodity becomes the driving force behind the social relations we have in society, relations formed not of our own volition, but rather from the market transactions occurring. This creates the almost supernatural impression that commodities control human beings. The immeasurably large amount of money spent globally each year on advertising acts as a powerful influencing force on morality, values, traditions, customs, and other aspects of culture that we do not realize exist only because of commodity fetishism and not because we freely and collectively decided to value these things. From Capital, Marx explains his theory of commodity fetishism by arguing how the values we attribute to commodities do not actually come from the physical nature of the commodities themselves:

As against this, the commodity-form, and the value-relation of the products of labour within which it appears, have absolutely no connection with the physical nature of the commodity and the material relations arising out of this. It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. In order, therefore, to find an analogy we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men’s hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and is therefore inseparable from the production of commodities.

A good contemporary example of commodity fetishism is the diamond. A lesser known fact about diamonds is that their expensiveness is not because they are inherently rare, but because diamond corporations artificially control the supply of diamonds in the market thereby dramatically raising their prices.1 The critical question is then raised of how truly and objectively valuable a diamond is, and where comes the value and urge to jump in to save a diamond ring when it accidentally falls into a body of water. Additionally, the most interesting fact about diamond rings is that the tradition of buying them as a necessary part of marriage was almost entirely concocted in the 1930s by the advertising of the company De Beers, a company which held a very long monopoly on the diamond supply throughout the 20th century. The historical tradition of diamonds being something possessed and worn only by wealthy ruling classes changed with the advertising campaigns of De Beers which successfully rebranded them as something valuable, desirable, and obtainable by the working class, a prime example of commodity fetishism.

From their high prices to involvement in social traditions, much of the aspects surrounding diamonds were created only by advertising.

From their high prices to involvement in social traditions, much of the aspects surrounding diamonds were created only by diamond corporations.

One of the primary philosophical arguments in defense of markets by capitalism apologists is that markets embody freedom and individual choice since persons freely consent to market exchanges, thus meaning that each exchange fulfills the interests of each individual. The problem with this view is that its premise of valid consent stands poorly since an individual has no choice but to participate in markets or else face the risk of starvation, homelessness, and other ills resulting from refusing to purchase or sell something. This is similarly why the supposedly “voluntary” employment between laborers and sweatshop owners in the Third World is not truly voluntary and consensual, as both markets and sweatshops represent the status quo, and individuals cannot feasibly and practically escape this status quo. One is thus born into a market society and through conditioning and lifelong practice is molded to think about goods and services as being inseparable from markets, and so markets cannot reasonably embody freedom and individualism through consent, but rather embody the status quo.

Since markets involve money, they are also one of the mechanisms that maintain inequality in our society, such as inequalities of wealth and class, which is our third and final critique. In explaining how “economic thinking and market reasoning have reached into spheres of life far beyond the domain of material goods,” philosopher Michael J. Sandel mentions how Gary Becker, a Nobel Prize-winning economist, seriously proposed that the public debate over immigration could be solved by selling or auctioning off the right to immigrate.2 The immediately visible problem with such proposals is that in an extremely unequal world where 85 of its richest people own as much wealth as the poorest half of the world, this would end up not only maintaining inequality between citizens in a nation but between nations themselves, as only the financially privileged could afford the right to immigration.3 This proposal and many others, which reject ethics, illustrates the morally degenerate premises that mainstream economics often functions by and how markets can be instrumental in maintaining inequality. As another example, world hunger exists not because there is insufficient production of food to feed the entire world, but because we do not have an adequate system of distribution for this production leading to the tragedy of people starving in front of food because they cannot make a market purchase.4

If we accept these criticisms and conclude that markets are morally non-ideal, then we pave the way for subsequent discussions of economic replacements for markets, as markets are simply one possible system for the distribution of goods and services in a society. The notion that markets could be replaced in our society with an alternate system of distribution may seem initially radical, but such a change allows us to answer to long respected and uncontroversial moral virtues and principles like cooperation and to negate other vices like selfishness. This would allow for a society that exhibits significantly more consistency in its moral views, and which improves its practice in regards to handling goods and services. A philosophical and moral critique of markets should thus be included as an important part of a wider critique of capitalism and the status quo, a critique that is vital to establishing justice in the economic sphere of life.

– Dino Mehic (Moontouch)

References:

  1. http://www.washingtonpost.com/wp-dyn/content/article/2010/07/02/AR2010070203990.html
  2. http://www.economist.com/node/16424085
  3. http://www.theguardian.com/business/2014/jan/20/oxfam-85-richest-people-half-of-the-world
  4. https://www.oxfam.org/en/pressroom/pressreleases/2009-10-16/world-food-day-there-enough-food-grown-world-everyone-op-ed
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How Capitalism Influences Our Morality

When most people criticize capitalism and its corporations for allegedly creating certain problems in society, they are keen to expose and analyze problems that are very clear and conspicuous. These problems can range from starving minimum wages, pollution of the planet, profit-driven war, inequality of wealth, inefficiency and many other social issues that are concrete and visible. There is one peculiar and more abstract social theory however that is less widely known, and it is the ability in capitalism or any socio-economic system to create and control our ethical beliefs, beliefs that can render our public verdicts on anything from illegal substances, abortion, racism, premarital sex or any particular issue of the day. By use of a known Marxist theory, in this post I shall examine a couple of historical and contemporary ethical issues to draw direct causal links from the economic phenomenon of capitalist profit to ethical behavior or belief. Moreover, because of issues like these I’ll defend that the theory ought to be taken more seriously at least in regards to the morality of our day.

In A Contribution to the Critique of Political Economy (1859) and other works, Karl Marx argued for a particularly bold social theory called the base and superstructure. For Marx, the base is the given socio-economic system of a time period, “socio-economic” in the sense of how people work, who owns and manages their workplace, and who picks the fruits of the laborer’s work in the format of profit. The superstructure is essentially the category which contains every other aspect of human society, which includes morality/ethics, religion, family, the state, politics, law, media and so forth. Marxist theorists have argued that the base is what creates and influences the superstructure, and moreover that the superstructure is something which rationalizes and defends the base. Since the two groups are connected, a particular superstructure changes only when the base does too. In his Critique of Political Economy, Marx gives us a rough outline of how this theory works:

In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness. At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.

[…] No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.

Karl Marx argued for a social theory where economics creates and drives many aspects of our lives.

Karl Marx argued for a social theory where economics creates and drives many aspects of our lives. (image author unknown)

Marx is very firm and adamant about drawing a direct causal link between the economic system of a time and the previously described phenomena that compose the superstructure. Since his original theory is radical in arguing that most everything reduces to an economic system, many contemporary social scientists do not agree that is the case for absolutely every element of the superstructure. Acknowledging this criticism however, is it possible to understand at least moral opinion or behavior in the context of this theory? Let’s examine two possible applications of Marx’s theory, of which the first will be a function of racism against American blacks in the days of slavery and the second of the legal and moral views on marijuana.

In his highly influential A People’s History of the United States, Howard Zinn not only plays his historian’s role of detailing the atrocities of racism in the 19th century US but also boldly argues for its material function in society in the master-slave relationship. Far from racism simply being a result of physical discrimination of persons who look very much different from another, racism is a crucial tool for the slaveholding capitalist class to keep slaves in their subservient position required for the slaveholder’s profit:

It may be that, in the absence of any other overriding factor, darkness and blackness, associated with night and unknown, would take on those meanings. But the presence of another human being is a powerful fact, and the conditions of that presence are crucial in determining whether an initial prejudice, against a mere color, divorced from humankind, is turned into brutality and hatred.

[…]

Racism was becoming more and more practical. Edmund Morgan, on the basis of his careful study of slavery in Virginia, sees racism not as “natural” to black-white difference, but something coming out of class scorn, a realistic device for control. “If freemen with disappointed hopes should make common cause with slaves of desperate hope, the results might be worse than anything Bacon had done. The answer to the problem, obvious if unspoken and only gradually recognized, was racism, to separate dangerous free whites from dangerous black slaves by a screen of racial contempt.”

By this view, racism would rest in the superstructure and function as something created and guided by Marx’s base, which in this specific scenario is capitalist slavery. The capitalist has legal ownership and management of the slave’s workplace and the slave’s created profit from the products the slave creates but does not keep. It would be absurd for us to imagine an American slave society, which Zinn argues was historically of the time one of the worst in the world, as being absent of viewing the subjugated group as a lower people. As mentioned before, the superstructure often does prop up and defend the base, which would give racism the function of legitimizing and rationalizing the capitalist base. For example, one common point of racist ideology was and is to compare blacks to wild monkeys in appearance, behavior, and intelligence and to deduce from this that a black person is not socially fit to live independently from slavery. Clearly showing superstructural belief, the racist slaveholder in this case argues that slavery and their participation in it is a vital necessity for society.

More than a century later, American capitalism continued to grow in concentration and de-emphasize smaller level hierarchy like with chattel slavery and instead focus on the corporate model. This also paved the way for new and more complex methods to influence law and ethics. For most of human history, including in the US, cannabis was a substance that was freely produced and consumed.1 In 1619, the Jamestown Colony went as far as to mandate and encourage the growth of the plant because of its immense economic benefits. Not including the many contemporary US presidents who admit to cannabis use, cannabis was also a substance that was used and farmed by many Founding Fathers from George Washington to Thomas Jefferson.2 Lacking any moral and social stigma for much of American history, the legal and ethical climate behind marijuana began to dramatically change starting with the 20th century.

The eventual increased ease and affordability of processing cannabis into many other valuable forms, such as paper and plastic, seriously began to threaten the profit models of established capitalists who owned businesses related to these materials.3 William Randolph Hearst, one such capitalist who owned the nation’s largest chain of newspapers, regularly published propaganda in his papers. In one example, black men became berserk because of cannabis use and raped white women. The chief financial backer of the petrochemical company DuPont, which still exists today, appointed Harry J. Anslinger to the Federal Bureau of Narcotics in 1931 who campaigned against marijuana. Anslinger also lobbied for the Uniform State Narcotic Drug Act which passed in 1934 allowing individual states to regulate the substance.4 The definition of illegal use of cannabis was continuously expanded over the years by additional laws to ultimately bring us to the status quo.

Starting with the 20th century, American capitalism and government began to successfully propagandize the masses to disapprove of cannabis

Starting with the 20th century, American capitalism began to successfully propagandize the masses to disapprove of cannabis

Even today, lobbying against the growing acceptance and legalization of the plant continues to be purely dominated by capitalist interests whose profit models would be seriously threatened by legal and more widespread use of the plant. Among the top five special interest groups doing so include alcohol companies, private prisons, and the pharmaceutical industry.5 Alcohol companies would face more serious competition in regards to what people recreationally consume, and so they lobby against laws to legalize and tax the plant like with California’s Proposition 19 in 2010. Private prisons, whose populations are composed of huge portions of drug offenders allowing them to make millions of dollars through incarceration, frequently bankroll anti-cannabis politicians and worm their way into our state to combat legalization. Pharmaceutical corporations understand that cannabis is a highly effective replacement for countless prescription drugs that have side effects, and so they are the second most tenacious lobby against legalization. The latest data shows that a majority of Americans support the legalization of marijuana, and yet this corresponds to a majority of states keeping it strictly illegal.6 With the previously described capitalist businesses, it becomes clear then that there is a huge potential for economics being a primary culprit in this with corporations influencing the legal and ethical superstructure.

If Marx’s theory holds any kernel of truth in regards to culture and morality, then there is a serious systemic problem brought on by capitalism which exists in our society and impacts this. If the problem is systemic, then certain social approaches we believe need to be more aggressively pursued will hold little to no societal sway due to attacking the symptoms and not the disease. For example, many anti-capitalists believe that the US government should have gone on a spree of legal prosecution of bankers and other capitalists who contributed to the current economic crisis like in Iceland.7 Presumably such an event would create a legal and moral precedence against others who play the capitalist game to not ever repeat such a catastrophe. A systemic approach to attacking capitalist ethics and behavior would unfortunately not find such a thing effective, as behind the courtrooms and legal codes still exists the socio-economic system of capitalism which drove such behavior in the first place.

By this approach, a paradigm shift is then necessary for all reformers and anti-capitalists if they wish to truly become more effective in reducing capitalism’s power in shaping our moral beliefs and behaviors. Instead of appealing to raw ideas about justice, equality, and altruism within capitalist society in hopes of fighting its morality, we should instead play the role of the social scientist as Marx would recommend and locate the systemic problem: capitalism itself. By doing so we would rattle the foundations of Marx’s base and consequently cause its collapse and that of the superstructure also. Society would finally be free of such economic relations built on hierarchy and self-interest which have a stranglehold on our morality, and we would be able to pave the way for a new economic system which allows the possibility in society to finally enter into the ethical relationships we desire.

– Dino Mehic

References:

1. http://www.pbs.org/wgbh/pages/frontline/shows/dope/etc/cron.html

2. http://norml.org/marijuana/industrial/item/introduction-5

3. http://wafreepress.org/article/090304marijuana.shtml

4. http://brainz.org/420-milestones-history-marijuana/

5. http://www.republicreport.org/2012/marijuana-lobby-illegal/

6. http://www.gallup.com/poll/165539/first-time-americans-favor-legalizing-marijuana.aspx

7. http://rt.com/op-edge/iceland-bank-sentence-model-246/