The irrationality of capitalism
You push a button on your phone and, minutes later, an Uber appears. Hidden behind this seemingly simple action is the labour of millions of people: cobalt miners in Congo, assembly line workers in Shenzhen, software engineers in Silicon Valley and the driver in your city. These workers will never meet one another, speak different languages and work in vastly different conditions. Yet, through a vast web of global market relations, what appears as disconnected labour is unified into a single product.
This is the dynamism of capitalism, one of its defining features that even its earliest critics recognised. In The Communist Manifesto, written in 1848, Karl Marx and Friedrich Engels noted that the capitalist class, “during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together”. The statement is even more accurate today. Modern capitalism can produce enough food to feed the entire global population twice over. It has the technology to draw energy from the sun and transfer it to every household on the planet. Medical advancements have eradicated diseases that used to claim millions of lives.
Why is it, then, that so many people go hungry every day, live with little or no access to electricity and die from totally preventable diseases?
The answer lies in the very functioning of capitalism. A small minority of individuals control what is produced, how it is produced and who gets access to it. Behind every decision they make lies a single motivation: profit. This is the condition every product must meet before it will be produced. If it fails this condition, it isn’t produced. Or if, after production, the product becomes unprofitable, then it likely is destroyed rather than distributed: Why pay to put it on the shelf? Human need is not only not a second thought, it is not even a thought.
Such a system, in which all production is subordinated to profit, leads to irrationality, absurdity and outright barbarity.
A good harvest can become a bad thing because it creates an oversupply that pushes down prices. In some cases, it makes more sense, from the capitalist’s perspective, to destroy some of the crop than to send it to be consumed. This happened on a mass scale during the COVID pandemic. In the US, demand from restaurants and other hospitality businesses plummeted almost overnight as people stopped eating out. In response, farms all around the country began destroying food that was no longer profitable to sell. At one point, farmers were tipping around 5 percent of the country’s milk supply down the drain, according to the International Dairy Foods Association. This was at the same time that millions of people were losing their jobs and facing food insecurity.
Just as depraved is the way that corporations use patents to block cheaper versions of medicines, as happened in South Africa with the HIV/AIDS epidemic. In 1997, some of the world’s major pharmaceutical companies sued the South African government to stop it from producing a generic (and cheaper) version of a drug that could combat the epidemic. To the corporations, the protection of their intellectual property was a far greater concern than alleviating the suffering of the millions of people with the virus/disease. While the court case was pending, estimates suggest that up to 20,000 people per month were dying.
For years, the corporations fought tooth and nail, claiming that allowing generic versions of their drugs would threaten all medical innovation by destroying the patent system. It was only in 2001, under extreme international pressure, that they dropped the lawsuit. Hundreds of thousands of people died who could have survived had they had access to the medicine. An industry representative later made light of the lawsuit, saying, “People ask me how we could have been so stupid as to sue Nelson Mandela. I tell them: We had to. Mother Theresa was already dead”.
Finally, consider the absurdity of planned obsolescence, in which companies design products to break down after a few years to force you to buy a new one. The classic case is the light globe. Since at least the late nineteenth century, the technology has existed to produce globes that last tens of thousands of hours. In fact, the famous centennial light globe in California has been running continuously since 1901. But products that last a long time, meaning you don’t have to buy as many, do not fit the logic of capitalism. This was the story behind the infamous Phoebus Cartel in 1925, which included General Electric and Phillips. The cartel agreed to produce light globes with a one-thousand-hour lifespan, forcing customers to purchase extra globes. Two years later, an executive bragged that sales had increased five-fold.
Ironically, it required significant engineering innovation to design a light globe that would break after 1,000 hours. To do it, the Phoebus companies shared technology and know-how. But when one company thought it could break the agreement, the head of Phillips sent a dire warning: “After the very strenuous efforts we made to emerge from a period of long-life lamps, it is of the greatest importance that we do not sink back into the same mire by ... supplying lamps that will have a very prolonged life”.
Today, there are countless examples of this practice. Major phone manufacturers such as Apple and Samsung have paid millions in fines for all sorts of things that force you to replace your iPhone or Galaxy: apps that don’t work on older models, software updates becoming unavailable after a few years, batteries that make the phone eventually unusable but are not replaceable with a generic battery, new charging cables that make older chargers redundant, monopolistic control over parts; the list goes on.
All of these examples are part of the perverse logic at the heart of capitalism: people go hungry because there is too much food, are homeless because there are too many homes, are sick because their treatment isn’t profitable and are forced to repeatedly buy the same product because it is designed to stop working.
Capitalism, in this sense, is different from every human society that came before it. In all pre-capitalist societies, production was for people’s use. The feudal landlord took what his peasants produced and ate it. Where there was hunger and starvation, it was because there was not enough food. It is only under capitalism that people lack something because there is too much of it.
Modern capitalism is the first system in history with the technical capabilities to overcome the misery that has plagued humanity for millennia. Yet, at the same time, it has produced one of the most unequal societies history has ever known. This is not an aberration or capitalism gone wrong. It is the system working perfectly in the interests of its rulers.
