Throughout the majority of human history, every member of a community was engaged in tasks vital for survival. The agricultural revolution, however, marked a pivotal shift where land became a crucial, collectively-managed resource. It was inevitable that certain people became specialized in the management and protection of that land, in addition to providing other services for the community. Markets for exchange grew, money and banking was developed, and a centralized decision-making process supported by taxation evolved. In this era, while life was tough, everyone had a role to play and was therefore, gainfully employed. As markets grew, so did the concept of private ownership. Capitalism was born.

During the feudal era, 90% of the population was involved in agriculture.

Capitalism in a nutshell

Capitalism is a process where people buy physical commodities such as tools, or services such as labor in order to enhance or accelerate the production of goods or services, which are later sold in the market. If the sales revenue surpasses the money initially invested then they make a profit, which they can use to repeat the process and expand their business.

However, Karl Marx pointed out a glaring flaw in this cycle. He postulated that profit margins are primarily widened at the expense of the workforce. The argument lies in the perceived under-compensation of laborers whose sweat and toil contribute significantly to the final product. The skewed distribution of market proceeds between capitalist and laborer is the heart of his criticism. 

Recording musicians to create sample libraries is an example capitalism.
Recording musicians for sample libraries is an innovation that reduces the number of workers in music production.

Capitalists rebut this criticism by emphasizing the concept of risk reward. They argue that to realize a business idea, a capitalist must make substantial preliminary investments in tools and labor, often in the face of unpredictable setbacks. The risk of losses emerging from unforeseen circumstances such as the sinking of a ship, a mine collapse, or a poor harvest should factor into potential rewards. Thus, they believe that the risk they assume justifies the profits they gain.

Labor-saving machines: An old problem about to get a new lease of life

The issue of machines replacing workers became rather topical again in 2023 due to the rise of Artificial Intelligence. But first let’s consider the case where a capitalist pays musicians to record their performances for a sample library creating virtual instruments. A virtual instrument captures the musical notes, gestures and techniques of a performer or group of performers and turns them into something that can be manipulated by a computer program. At present they require some skill as an operator to use, but that won’t be true for much longer.

Until quite recently a film or television soundtrack required musicians to record in a studio, or at least be a composer able to play several instruments and lay down some tracks. However with the advent of sophisticated virtual instruments the need to record a musician with a microphone in a studio has become less necessary. A single keyboard player can generate an entire orchestra using only a computer. Indeed many productions dispense with musicians altogether except perhaps for a single composer/player who programs the music more than performs it.

Again capitalists will argue that other jobs are created, such as programmers who create the software for the virtual instruments. But in reality the amount of work lost to musicians and recording studios is not replaced by jobs the new technology creates.

And the 2023 screenwriter’s strike in Hollywood made a particular complaint about how AI could be used to replace writing jobs, essentially for the reason that the technology uses their past work to train itself and create something that makes them obsolete.

The analogy with virtual instruments is apt. It is not just the musicians who record the library that have made it possible but all the instrument makers in history, the performance standards and techniques of musicians that evolved over the centuries, as well as the acoustical and audio engineers involved in capturing the sound.

The problem? A tool is created that devalues the worker in the long term for a short term capital payment. And can that payment adequately compensate for the future lost work for all those potentially affected? Not if the labor-saving innovation isn’t adequately shared across society by reducing the necessity for work to access food, fuel, and shelter. Not if society forgets its obligations to the individual to provide them an opportunity for a living. And not if that opportunity debases the individual to serfdom forced to perform any task in service of an elite.

Here again the accusation is that the capitalist under-compensates the worker just as Marx says and gets rich off of the sweat and toil of their labor. Despite its ingenuity and potential benefits, AI is poised to upset many jobs of the petit bourgeoisie and white-collar industries such as accountants, lawyers, translators, writers, programmers, and graphic designers. Composers are also not far from being rendered superfluous.

The proletariat have always had to put up with their marginalization in the marketplace. Time will tell if the bourgeoisie will be as accepting. What jobs are people supposed to do if not only agriculture and factory jobs, but also office jobs disappear? The whole paradigm of work must be revised or we are facing a dystopia of Big Brother proportions.

Capitalism: The road to serfdom?

As extreme wealth transfers into fewer hands, certain individuals gain greater influence over government policy, resist redistribution of wealth through taxation, use the power of the police and armed forces to protect themselves, the law to validate their ownership of resources, and generally use their position to control others. People then become subject to the whims of this elite and may find themselves once again building pyramids for Pharaohs. I could argue that we are doing this already and our democratic systems are just another tool of control keeping the people off guard.

But is capitalism the problem? Remember it’s just a process to be more productive motivated by profit and greed. Greed is a quality we could probably find in all life, if not all the processes of the physical universe. Every thing, including the stars, takes as much as it can from its environment until it meets resistance. So let’s keep in mind that maybe it isn’t capitalism but our ineffectiveness in controlling human greed and corruption that’s the problem. It’s the celebrated concept of the Free Market that allows society to devolve to, in the words of Thomas Hobbes , “a state of nature” characterized by anarchy and survival of the fittest.

Put another way, why should we only allow the markets to decide what’s valuable?

Industrial Revolution: A Game Changer

For millennia, humankind has been crafting tools designed to alleviate the burden of laborious tasks. However, the advent of the industrial revolution marked a quantum leap in this trend, introducing innovative machines that ramped up efficiency and productivity in various sectors, notably agriculture. The impact of these machines was so profound that they unintentionally rendered many individuals unemployed; their manual labor surplus to requirements.

In the past, under a Feudal system, nobility held the reins to land and resource ownership. But with the rise of capitalism, this control shifted firmly into the hands of capitalists, effectively blocking individuals from using these resources for basic survival needs like food production or fuel collection. Consequently, these individuals’ declining demand in the market greatly reduced their buying power, leaving them just as susceptible to exploitation as they were during the Feudal era.

By 2000, less than 2% of the U.S. workforce was employed in agriculture.

In the grand scheme, industrialization has arguably led to a wealthier standard of living for many. While the surge in production efficiency has concentrated wealth in the hands of a minority, the profits and rewards have kindled an era of entrepreneurship, innovation, and philanthropy, broadening the marketplace, reducing the cost of essential goods, and improving quality of life. Consequently, the average person has gained the ability to afford an increasing number of modern conveniences such as refrigerators, vehicles, and education. 

However, it’s becoming increasingly difficult to ignore the unsettling truth that our rampant consumerism is causing significant harm to our environment. Moreover, the chasm between the rich and the poor is widening at an alarming rate, as countless individuals lack access to basic necessities such as clean drinking water.

“History cannot be interpreted without the aid of knowledge derived from the system of economic production.”

Karl Marx

Capitalism: A Boon or a Bane for Employment?

Advocates of capitalism argue that unemployment is merely a transient phase. This notion hinges on the insights garnered during the industrial revolution – that increased efficiency generates wealth, which subsequently ushers in new sectors for production. These sectors, brimming with fresh opportunities, demand novel skills and thereby create new jobs. It’s true; full employment might be a far-fetched ideal but undeniably, as a collective, society witnesses a significant increase in prosperity. This accumulation of affluence, in turn, helps curtail the adverse impacts on the unemployed and the impoverished. But, the question that looms large is – can this cycle run indefinitely?

Substantial evidence suggests that such incessant growth and consumption in multiple industries are wreaking havoc on the environment, subsequently posing a threat to sustainable development. Imagine a world where every human being possesses a car and expends energy resources at an equivalent rate of the average American or European. The resulting pollution and waste would potentially exhaust vital resources rapidly, precipitating drastic alterations in our climate and biosphere that could render the planet uninhabitable.

Americans throw away 68 pounds of clothing per person, per year.

Have you ever contemplated the relentless drive of advertising and social media urging us to desire more commodities? You may question if the constant craving for these goods and services is an inherent human need. Might we, as a society, be better served by focusing our collective energy on guaranteeing global access to essentials such as potable water, nourishment, and secure living conditions?

In 2019, the average American spent $18,000 on nonessential items.

In our modern, developed societies, we often enjoy an array of material assets, a life of abundance. However, the disconnect between our professions and our consumable necessities, such as food and fuel, is gradually increasing. These primary commodities, paradoxically, exhibit an unsettling trend of inflating prices. One might argue that many people are engaged in jobs that fail to cater to our most fundamental societal necessities. And yet, there’s an ample number of people who are either unemployed or underemployed, striving to meet basic survival needs in an environment of profuse resources. The world is abundant, yet these people find it hard to make ends meet.

The concentration of power and wealth: A Side Effect of Capitalism?

Picture this: A thriving factory hires hundreds of workers. The management then makes the decision to introduce new technologies and automate a certain portion of its production line to boost productivity. A necessary move for the firm perhaps, but what does this mean for the workforce? 

This is where the sharp edged blade of progress cuts deep. Advances in technology, while essential for economic growth and prosperity, often leave human labor in the dust. Routine tasks get automated, machines replace human labor, and suddenly the once thriving workforce is reduced to a handful of individuals. Serving as the paradox of our times, this economic advancement could lead to the evolution of a peripheral workforce, battling redundancy and unemployment. 

The production of too many useful things results in too many useless people.

Karl Marx

In capitalism, we experience a rigorous competition where businesses are incessantly striving for improved efficiency and higher profit margins. As we succumb to this relentless chase, our attention may deviate from what is genuinely beneficial for humanity, veering towards market manipulation, which singularly aims to amplify the wealth and societal dominance of business owners.

Global advertising spend is expected to reach $605 billion in 2020, a 4.2% increase from 2019.

As a pillar reinforcing this never-ending cycle of consumerism, the tools of social media and marketing step in, creating artificial consumer demands, thereby catalyzing psychological unease among numerous individuals wrestling with the fear of perceived insufficiency.

The consumer society is a kind of soft police state. We think we have choice, but everything is compulsory. We have to keep buying or we fail as citizens. Consumerism creates huge unconscious needs that only fascism can satisfy. If anything, fascism is the form that consumerism takes when it opts for elective madness.

J.G. Ballard

The Wealth Gap and can Capitalism Solve it?

As we delve deeper into the capitalist society, it’s imperative that we grapple with the shadow this economic system casts — wealth inequality. In theory, capitalism fosters competition, compelling everyone to contribute their best to society. However, we’re noticing a disturbing trend: this system may also be exacerbating wealth disparities, carving out an increasingly polarized future where class divisions intensify, commodifying our very existence. 

Let’s consider the way wealth is accrued in our capitalist world. Capital begets capital, as those with money have the avenues to invest, to take risks, to generate more riches. Many consider this central tenet of capitalism as productive. But there lies the rub — it’s an escalating cycle that disproportionately benefits the wealthy, leading to a lopsided concentration of power and resources. The top one percent amass sizeable fortunes, while billions are left vying for the scraps. Poverty and destitution, no longer outliers, loom large as disconcerting pieces of a perpetually unequal puzzle. 

Sadly, this seems to be more than just a blip on the radar. Even as the global economy expands, the gulf between the rich and the poor isn’t shrinking. On the contrary, this gap continues on a trajectory of expansion. The capitalist system, originally conceived as a level playing field, a platform for individual triumph, increasingly appears as a marathon where the most affluent have a head start, and the rest, no matter how hard they run, risk being left behind. 

Amid this flurry of financial fragmentation, the concept of prosperity becomes paradoxical. It’s tempting to hail the astronomical wealth amassed by a shrinking minority as a sign of societal health. Yet, to do so would be to overlook the grating reality that this prosperity is a flickering mirage for the majority. It would be ignoring that we’re on the brink of a society where unchecked capitalism extends a chasm of inequality that, if overlooked, risks swallowing our collective humanity. 

In conclusion, it’s vital that we reorient our perspective and reassess capitalism’s role. We must ask ourselves: Are we okay with a system that sheds labor like a snake sheds its skin, creating obscene wealth for a pebble-sized minority and leaving the remainder marooned in a sea of insufficiency? The answer to this question may well decide the fate of wealth equality and the landscape of our future society.

So much of what we call management consists in making it difficult for people to work.

Peter Drucker


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