Monday, October 5, 2009

In Search of a New Paradigm—Part 1: Is Our Love Affair with Capitalism Over?...An Ecologist’s Perspective

Do you remember when you first fell in love? Nothing beat the exalting thrill of that first scintillating kiss. The kiss never lies. You just knew you were both in love and that it would be forever. Then followed the exciting romance…. But when the romance fell from grace there followed panic and hysteria, a devastated ego, soulful hurt and then deep grief of a terrible loss … like a piece of you had been lost. What followed the loss of wholeness and naiveté was a great skepticism in the whole relationship thing, along with a reluctance to open your heart again to anyone. You ended up not trusting in people’s intentions in order to protect your soul and your wounded heart. Some of you may have decided to never give yourself totally to love like that again. Blame love itself and never suffer the fool to it again. Welcome to the cynical world.

I may be stretching the metaphor here but … well… read on… Rogue filmmaker Michael Moore did name his latest film “Capitalism: A Love Story” after all…Moore’s film was released last week to mixed reviews: Xan Brooks of The Guardian says, “Capitalism: A Love Story is by turns crude and sentimental, impassioned and invigorating. It posits a simple moral universe inhabited by good little guys and evil big ones, yet the basic thrust of its argument proves hard to resist.” Leslie Felperin of Variety says, “By returning to his roots, professional gadfly Michael Moore turns in one of his best films with Capitalism: A Love Story. His target is less capitalism qua capitalism than the banking industry, which Moore skewers ruthlessly, explaining last year’s economic meltdown in terms a sixth-grader could understand.” According to Kenneth Turan of the New York Times, Moore’s “notion that capitalism, far from being a system that rewards excellence, is a scheme set up to make a profit on absolutely anything. He fears it has in recent decades turned American society into a culture that says money is the only value.”

At the same time Naomi Klein’s bestselling polemic The Shock Doctrine was released as a feature film. The Toronto Star posted York University’s Leo Panitch’s essay “Marx and his ideas rise from the dustbin of history”. The September 19th edition of the

The National Post published a front page story on Richard Wolff, economics professor at the University of Massachusetts (now lecturing worldwide), who promotes a model of Marxism in the film “Capitalism Hits the Fan

Christine Monnier, sociologist at the College of DuPage, Chicago, suggests that the initial public hysteria over the possible collapse of capitalism has ebbed to a more chronic social anxiety about the way our economy operates. Have we fallen “out of love” with a system our romantic notions can no longer support? Monnier explains that “the meltdown [of 2007-2008] offered a less clear cut moral narrative, with no readily identifiable villains or obvious remedy” (Kevin Libin of The National Post). “We know we’re supposed to take action, but it’s not clear against what and it’s not clear what effect we expect…and that basically leaves everybody in conditions of uncertainty.” Not a very nice place to be; nor does it inspire confidence, forward-thinking or creativity, even. Although the broader factors, such as too much liquidity along with irresponsible lending and borrowing, are obvious contributors, the more subtle details elude most of us.

Wolff suggests that the financial crisis we experienced and are presently dragging ourselves out of is part of a systematic crisis; a crisis that involves how and why we do business, which in turn is irrevocably tied to how we define ourselves.

According to Wolff, North Americans have chosen to define our self-worth and measure our success in life according to our standard of consumption. We define our success by what car we drive, what neighborhood we live in, what outfit we wear. Americans have become related to consumption in a way that other working classes in the rest of the world have not. A good example is France, where I am told citizens value art and philosophy over money and power. To a Frenchwoman, how much money you have isn’t as important as how much culture you bring to a conversation. I speak to this in two previous posts, “Falling for Paris” and “Pearls Before Breakfast”. On the other hand, advertizing (an industry devoted to promoting consumption) has risen first and developed further in the United States than anywhere else, says Wolff. He tells the story of 150 years of working history in America, where productivity, wages and profit all rose with consumption until the 1970s when, among other factors, wages leveled out due to reactions to the post-war economic recovery of competitors like Japan and Europe. But, even though wages leveled out, productivity (and profit to corporate share holders along with it) continued to rise; ironically because workers were compelled to put in more hours and/or take on extra jobs to pay for their inflated lifestyles.

According to Wolff, the solution is not to build a regime of further regulation in a government-run traditionally regarded socialist system, in which corporations currently have the means to avoid or remove said regulations. Wolff recommends that people who do the work for the enterprise become collectively their own board of directors, giving the people who depend upon the survival of those regulations the power to ensure that the regulations are not undone, “democratizing the enterprise.” Wolff asserted that a political democracy cannot be sustained without an economic democracy underpinning it.

Wolff provides examples of companies that use this model successfully: small companies located in the Silicon Valley, south of San Francisco, in which the workers act as their own collective board of directors. According to Wolff, many of the great breakthroughs in computer technology and telecommunication in the past 50 years were achieved by these types of firms through what they call “innovative entrepreneurship”. Wolff is describing syndicalism, which “holds, on an ethical basis, that all participants in an organized trade internally share equal ownership of its production” (Wikipedia). Syndicalism is a form of socialism that functions through co-operative alliances and mutual aid, with local syndicates communicating with other syndicates through a labor exchange, which manages and transfers commodities.” This kind of socialism, says Wolff, “begins and focuses at the bottom, with the individual.”

So, is it the basic premise of the Capitalist model or its application that’s at fault? First of all, scholars have long debated over the definition of capitalism. Most agree that its core elements include: 1) private ownership of the means of production, 2) creation of goods or services for profit in a market, 3) paid employment, and 4) prices and wages set according to market supply and demand. The origins of modern Capitalism and markets can be traced back to the Roman Empire and the free markets of the Islamic Golden Age and Muslim Agricultural Revolution, where the first market economy and earliest forms of merchant capitalism evolved between the 8th–12th centuries (Erdkamp, 2005). Aspects of merchant capitalism flourished in the late Middle Ages and spread throughout Europe in 16th century Europe. Capitalism dominated the Western world following the collapse of feudalism. In the 19th and 20th centuries, it provided the main means of global industrialization. The control and direction of large areas of industry came into the hands of trusts, financiers and holding companies. This period was dominated by an increasing number of monopolistic firms earning supernormal profits as large industrial cartels or monopolies and characterized by the ownership and management of industry by financiers divorced from the production process; and the development of a complex system of banking, an equity market, and corporate holdings of capital through stock ownership (Scott, 2005). The petroleum, telecommunication, railroad, shipping, banking and financial industries are characterized by its monopolistic domination. Inside these corporations, a division of labor separates shareholders, owners, managers, and laborers.

Proponents assert that a capitalist economy provides more opportunities for individuals to raise their income through new professions or business ventures than other economic paradigms. They maintain that the potential is much greater than in either traditional feudal or tribal societies or in socialist societies. Moreover, they suggest that the “self-organized” nature of an open market approach and profit motive successfully coordinates the wants and needs of millions of people. Philosopher/author Ayn Rand, a supporter of laissez-faire capitalism, maintained that the Capitalist model is the only morally valid socio-political system because it allows people to be free to act in their rational self-interest. Rand even created a code of morality, “Rational Selfishness” to describe it.

BUT...Because the Capitalist model relies on continued economic growth, Capitalist behavior will inevitably deplete our finite natural resources. Murray Bookchin argued that because capitalist production externalizes environmental costs to all of society, the burden of mitigating environmental impacts is not adequately addressed. I deal with this insidious problem daily as an environmental consultant.

The Capitalist model currently practiced by most large corporations follows a pattern that economist Joseph Schumpeter described as "creative destruction"—based on the fact that market economies undergo constant change. In ecologist’s terms, this approach is a “boom-bust” model, based on an unsustainable rising productivity that inevitably stresses its resources and is fated to crash and give way to its successor (if a successor is even possible). This is the same pattern followed by small microbes, insects and most weeds. According to ecologists, organisms that follow a pattern of unrestricted production, population growth and spread follow an “r-selected” pioneer-like lifestyle (MacArthur and Wilson, 1967; Pianka, 1970). R-strategists usually live in very harsh or dramatically changing or unstable or new environments. They are typically short-lived and invest everything in “the moment”, trying to beat the statistics of a climate that will kill most of their progeny. Our current status on the planet suggests evolving a “K-strategy”, exemplified by increased cooperation, less focus on number and more focus on quality and longevity. This practice is more apparent in Europe, where you can—and would want to— buy and keep a coat that will actually last twenty years.

Whether we consider the ideology or the practice of the dialectic, whether it is communism, capitalism, or socialism; one factor spoils every single one of these: greed. So, my take on all of this isn’t that Capitalism, per se, is bad or even not the best model for most cultures. Rather, it is that we have allowed our own personal greed to undermine a system that, despite its premise being based on profit and the gain of “capital”, could function on the power of reciprocal altruism. This is both the best and worst trait of Capitalism: its reliance on an individual’s integrity and altruistic behavior.

Power is an interesting phenomenon. Largely associated with dictatorships and large faceless corporations who make billions of dollars a year, power is often regarded as one in the same with greed, tyranny and oppression. Yet, power can exist in the smallest and humblest of individuals. Greed is an empty vessel with a large hole; it can never be filled. It is the opposite of love, and, ultimately, the opposite of power.

And with that we have come full circle with falling in love. Because, ultimately, to fall in love—and stay in love—is to give oneself the greatest power of all: the power that comes with the grace of pure altruism, pure giving, and ironically, pure “being”…


Erdkamp, Paul. 2005. "The Grain Market in the Roman Empire" Cambridge University Press
MacArthur, R. and Wilson, E. O. 1967. The Theory of Island Biogeography, Princeton University Press (2001 reprint).
Pianka, E. R. 1970. On r and K selection. American Naturalist 104, 592-597.
Cambridge University Press. “The Cambridge economic history of Europe” p. 437.Scott, John. 2005. “Industrialism: A Dictionary of Sociology” Oxford University Press.


Anonymous said...

Good Post Nina,

A couple of thoughts:

"If you want to know the true nature of a man, give him power." -Abraham Lincoln.

The theme of the Dalai Lama's recent visit to Vancouver, BC, Canada - Compassion

The difference between a Bill Gates/Warren Buffet and the Bank Execs that took huge bonuses when their operations were failing - Compassion.

The Bill and Melinda Gates Foundation shows compassion.

Maybe part of the problem or the joy with Capitalism is that it has a somewhat fuzzy definition.

All econonmic theories are just that - Theory!!! Reality is too complex.

Note regarding Silicon Valley: The Start Up companies and the folks behind them have interesting evolutions: A few clever people get together, build on their idea, garner some success, suddenly get money thrown at them (venture capital), then find that some bean counter wants to take control (to protect the investment) then next thing you know - Original people get shut out or leave and start a new venture.

Le Frommage

SF Girl said...

Spot on, Frommage... Especially about compassion.

You bring up an interesting point about start-up companies and individuals... Economics and Ecology are very similar, with terms being applicable interchangeably like niche, productivity and carrying capacity, equilibrium, succession, competition, co-evolution, and so forth...even in terms of theory vs. reality...

I will be blogging more on this topic later but here is an interesting link to a book on media competition and co-existence that uses the language of ecology:,+1970,+r-selected&source=bl&ots=7gm0GbBJqP&sig=0hGrGw79yHxjmGD-kIfyaMLmJks&hl=en&ei=vq3JSqmpDoSqswPojeShBQ&sa=X&oi=book_result&ct=result&resnum=8#v=onepage&q=pianka%2C%201970%2C%20r-selected&f=false

p.s. I liked your quote by Lincoln

Jean-Luc Picard said...

Michael Moore & The Guardian are noted anti-capitalists, so I wouldn't take much notice of them, Nina. The former's documentaries are one-sided, with no voice for the other side, and the other is a British pro-socialist newspaper.

That said, it was a well laid out post, with good points made, Nina.

SF Girl said...

I take less issue with strong bias than with lack of substantiating research and strength of argument (which Moore does accomplish and provide). If you know about their bias, you can still derive value from their proposal. Yes, I gathered that the Guardian is a pro-leftist paper...

cyn said...

Fantastic article. Love this post you wrote.

SF Girl said...

Thanks, Cyn... Much appreciated! It is an interesting topic... one worth discussing...

Princess Haiku said...

Hi Nina,
I stopped by to catch up on your blog and leave an Autumn greeting. You made some good points in your discussion and I agree that Americans need to turn inward in search of deeper values.

SF Girl said...

Hi Princess! Thanks for dropping by! And Happy Autumn to you! I hope you are keeping well and enjoying the fall colours where you are. I am traveling again and very much enjoying the fall colours as I pass through states like Wisconsin and Michigan... When I moved to British Columbia I really missed the seasons. Autumn is probably my favorite season with its bracing winds and nature's colour feast and fallen leaves like petals on the ground

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