On the free market it is legal and customary to violate the dignity of our fellow human beings.
By contrast, on the free market it is legal and customary to instrumentalize our fellow human beings, violating their dignity because our goal is not to protect it. Our goal is to gain personal advantage, and in many cases this can be achieved more easily if we take advantage of others and violate their dignity. What is decisive is my attitude and my priority: am I interested in the greatest good and the preservation of the dignity of all, which is something which affects me automatically and which I benefit from as well, or am I primarily interested in my own welfare and my own advantage, which others might, but will not necessarily draw benefit from? If we pursue our own advantage as our supreme goal, the customary practice is to use others as means to achieve this goal and to take advantage of them accordingly. For this reason, Smith’s perversion of goal and by-product leads to widespread violations of human dignity and the systematic restriction of the liberty of many.
Trust Is More Important than Efficiency: If we must constantly fear that our fellow human beings
will take advantage of us in the market as soon as they are in a position to do
so, something else will be systematically destroyed: trust. Some
economists say this doesn’t matter because the economy focuses completely
on efficiency. But such a view must be disputed, for trust is the highest
social and cultural good we know. Trust is what holds societies together from
the inside – not efficiency! Imagine a society in which you can trust every
person completely – would that not be the society with the highest quality of
life? And imagine the opposite, a society in which you had to mistrust everyone
– would that not be the society with the lowest quality of life? The interim conclusion to be drawn is radical: so long as
a market economy is based on pursuit of profit and competition and the mutual
exploitation that results from it, it is reconcilable with neither human
dignity nor liberty. It systematically destroys societal trust in the hope that
the efficiency it yields will surpass that achieved by any other form of
economy. When such matters are pointed out to mainstream economists three
familiar responses are commonly elicited:1. There is no alternative to the market economy; this is common knowledge and thus all further discussion is unnecessary.
2. Whoever does not acknowledge this wants to catapult society back into poverty and the nineteenth century or drive it straight to communism, and we all know how that ended.
3. The market economy is the most productive form of economy there is; history has proved this. Competition spurs human beings to the highest levels of performance – this is in addition to the fact that it is rooted in human nature and is thus unavoidable.
We need to take a closer look at this last fundamental
myth of the market economy: “Competition is in most cases the most efficient
method we know,” writes Nobel Prize laureate for economics Friedrich August von
Hayek.6 If a “Nobel Prize laureate” says this, it must be true – although there
is no Nobel Prize for economics. I have tried to find the empirical
studies which led Hayek to this insight but I have found none. I explored other economists as well, for in the
scientific community it is customary for colleagues to cite each other. And yet
I found nothing here either. None of the economists who have won a Nobel Prize
have ever proved through a study that “competition is the most efficient method
we know”. This cornerstone of economics is a mere claim which is believed by
the large majority of economists. And capitalism and free enterprise, the
world’s dominant economic model for the past 250 years, is based on this
belief. Regarding the crucial question, does competition create stronger
motivation than any other method? a plethora of studies have been conducted in
numerous disciplines (educational science, social psychology, game theory,
neurobiology) 369 of which studies were evaluated in a meta-study. And of those
with a clear result an amazing majority of 87 percent found that competition is
not the most efficient method we know; cooperation is. ... If honest economists actually wanted to build
the market economy on the basis of “the most efficient method” there is and
they took notice of the current state of scientific research, they would have
to base it on structural cooperation and intrinsic motivation. The fact that
mainstream economists do not do this is an indication that science and insight
play no role here but rather what dominates is the desire to underpin existing
hegemonic structures ideologically.
Those with power are served very well by competition: if
we, as human beings, do not learn to cooperate and act in the spirit of solidarity
we will not call power relations into question but rather will attempt,
instead, to elbow our way into the realm of power and the social elite. In
doing so, the majority will fall by the wayside. And the social climate will be
poisoned to ever-increasing degrees because we will constantly take advantage
of others, exploit and debase them in the pursuit of our own advantage,
weakening and destroying trust and social bonds.
The Consequences of the Pursuit of Profit and
Competition: The 10 Crises of Capitalism
Contrary to the prognoses and promises held out by the
theory of free enterprise, the pursuit of “self-interest” as the supreme goal
of competition leads to the following:
The Concentration and Misuse of Power: The
system-immanent pressure for growth – the pressure to become ever larger and
more powerful and to ultimately obtain the status of a “global player” – leads
to the emergence of gigantic corporations which misuse market power, close off
markets, block innovation, and devour competitors or push them out of the
market. In using such phrases as “brimming war chests”, “hostile takeovers” or
“kill your competitors”,9 the market idiom reveals what is ultimately at stake
when it comes to the pursuit of one’s own advantage.
Suppression of Competition and the Building of Cartels: Once only a few players are left, adversarial conflict can suddenly
turn into tactical, but not intrinsic cooperation. For the objective remains
the same: maximum profit. If power allows the formation of cartels and
oligopolies then preference will be given to this strategy because it is more
effective than competition. Competition produces losers; cooperation produces
only winners. This is why branch enterprises cooperate as soon as they can
(this being inadvertent and unappealing proof of the superiority of cooperation
– unappealing because in this case cooperation is not a goal but rather a means
of achieving a wrong purpose, namely to take advantage of others). The recent
bank bailouts show that the present economic model is not a matter of
competition and free enterprise at all but rather of (governments) securing
profits and power: this is the reason why the business and political elite
cooperate and eliminate the competition – competition evidently not being the
objective after all.
Competition Between Locations: States
systematically try to attract enterprises and improve conditions for the
pursuit of profit; the consequences are wage dumping, social dumping, fiscal
dumping and environmental dumping, preferential treatment of global
corporations over small local companies, and enticing special offers such as
banking secrecy and removal of banking supervision because these are viewed as
“locational advantages”. If the egoism of enterprises infects states, nationalism
will flourish in the midst of alleged “globalization”.
Inefficient Pricing: Prices are often not
the rational result of the activities of rational market participants but
rather the expression of power relations. The power created by supply and
demand is often very unequally distributed, which is why prices often reflect
the interests of the powerful rather than actual costs or values. The care
of children, sick persons, the elderly and gardens often is not rewarded
financially at all, for example, whereas the maintenance of hedge funds is
often astronomically expensive even though they have a negative impact on
society.
Social Polarization and Fear: The market
economy is a power economy. The larger – the more global – “free competition”
is, the greater will be the imbalance of power between the protagonists, and
with it the inequalities and the gap between the rich and the poor. In the USA
the best-paid manager now earns 350,000 times the legal minimum wage.10 This
has nothing to do with “rational pricing” or with efficiency or justice: it is
exclusively a matter of power. As a result, trust in society is declining and
fear is rising. In the USA, trust among people has declined from 60 percent in
1960 to less than 40 percent in 2004.11 The German Anxiety Index has risen from
24 percent in 1991 to 45 percent in the past few years.
Failure to Satisfy Basic Needs and Reduce Hunger: The
explosion in the numbers of the famine-stricken shows how little globalized
market capitalism is capable of satisfying even basic needs and thus protecting
human rights. In the early 1990s hunger affected fewer than 800 million people,
but in 2009, the Food and Agricultural Organization of the United Nations (FAO)
reported that 1.023 billion were affected; between 2011 and 2013 the figure
dropped to 843 million.13 Satisfaction of basic needs is not the goal of
capitalism; maximizing profit is. In many cases this leads to a situation in
which basic needs that have no purchasing power are not met (with nutrition
coming first, followed by medical care, housing and education), whereas
purchasing power for which no need exists requires the “invention” of new needs
(for example addictive foods, cosmetic surgery, SUVs). Capitalism
systematically misdirects creativity and investments.
Ecological Destruction: Since the supreme
goal of capitalism is to increase financial capital (and not the common good),
other goals such as environmental protection slide down the list of priorities.
In its Millennium Synthesis Report the UNO ascertained that the health
condition of almost all planetary ecosystems (oceans, fields, rivers,
mountains, forests) deteriorated between 1950 and 2000. They are approaching
their breaking point and sooner or later they will collapse. Then the
“performance” of those ecosystems which are necessary to sustain human life
will be in danger, impacting on climate stability, the regulation of humidity
and temperature, the control of diseases and vermin, soil fertility and
absorptive capacity. Capitalism is destructive because it strives blindly to
increase financial capital rather than the natural foundations of human life
and the economy.
Loss of Meaning: Since the objective of
capitalism is to accumulate material values, it quickly overshoots the side
effect of satisfying basic material needs, subjugating all other values –
quality of relationships and environment, time prosperity, creativity, autonomy
– in the process. In the EU, working hours increased again by 8 percent between
1995 and 2005.14 According to a poll conducted by Gallup, in the USA 70 percent
of American employees are unengaged with their workplaces or even actively
disengaged.15 More and more people become increasingly alienated from their
true desires and ideals and instead become addicted to consumption. With 24
million individuals affected, the compulsion to shop has become a pandemic in
the USA.16 In Austria, almost half of young people aged between 14 and 24 years
are “significantly at risk of becoming shopping-addicted”, with 10 percent
“strongly endangered”.17 This is a kind of success in capitalist terms: the US
economy invests more than $11 billion in its publicity attack on children.
Erosion of Values: In today’s business world the
most antisocial people make it to the top because what counts is optimization
of monetary targets: people who are “more able” to filter out all other human,
social and ecological goals are culturally “selected”. Today egoists are
particularly able to be “successful”. If the business world systematically
rewards egoism and competitive behaviour and people are viewed as successful if
they work their way up in this dynamic of incentives, these values will rub off
on all realms of society, starting with politics and the media and ultimately
affecting our interpersonal relationships as well. As the German social
psychologist Erich Fromm put it, “The capitalistic character shapes the
societal character”.
Shutdown of Democracy: When pursuit of profit and
self-interest are the highest goals, business protagonists do their utmost to
reach these goals. Not only interpersonal relationships, personal talents and
natural resources are used as means to this end: needless to say, democracy is
used as well. Since the times of Adam Smith the ethics of “self-interest” have
placed this above the common good, the hope being that benefit to the common
good will result as a by-product. The reality looks very different, however.
Global enterprises, banks and investment funds become so powerful that they
succeed in using lobbying, media ownership, political party financing and
public–private partnerships to make parliaments and governments serve their
particular interests rather than those of the common good. Thus democracy
becomes the last and most prominent victim of “free markets”.
The following is an excerpt fromChange Everything: Creating an Economy for the Common Good by Christian Felber (Zed Books, 2015):
No comments:
Post a Comment