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Communicating Capitalism: 7 Basics for the Uninitiated

Compared to much leftist discourse, the short narratives of the right-wing press are much easier to repeat – and that’s a problem.

Speaking as someone who has never set foot on a University campus, it often occurs to me that some discourse amongst the left can be quite exhausting. Discussion can quickly become esoteric and, by extension, difficult to engage with. The intellectual capacity required to draw value from positions presented in an array of academic language, or with references to a multitude of works, can be daunting.

In contrast, the right’s grip of the printed press has resulted in large swathes of working class people absorbing, and parroting, the poisonous soundbites of right-wing tabloid journalism.

But, unlike the uneven terrain of the printed press, in this digital space, we – those who demand a better world – can win. Therefore, as a matter of strategy, it is vitally important to attempt to accommodate people who find politics difficult to engage with, or who choose the intellectual comfort of political passivity. This is not to debase or denigrate analysis that draws on a plethora of assumed knowledge. Yes, there is a unique potential for people to quickly enrich themselves with knowledge and embrace new and different perspectives through the digital world. Yes, a world of working class autodidacts is more possible than ever – but we must recognise that not everybody is, or will be, ready to swim in the deep-end.

So, while we can acknowledge the limits of social democrats like Jeremy Corbyn, it would be dishonest to dismiss the importance of any success he may have in shifting debate and acting as a ‘soft left’ platform for the development of a much broader politics. I would attribute the majority of success so far in Corbyn’s Labour leadership bid to his plain speaking style. His delivery is easy to absorb and, though his policies are not new, they are simple to understand and imagine – and that’s massively appealing compared with a political elite which is united behind austerity. Despite being far less ‘radical’ on issues like renationalisation, we were told post #GE2015 that the Labour party’s defeat was because Ed Miliband was too left wing. The reality, however, is that Corbyn’s ideas on renationalisation have always been popular and that he is benefiting from the same political vacuum that won the SNP 56 seats in parliament just four months ago.

Here are seven key things to know about capitalism, which might underpin a broad anti-capitalism and act as the foundation for a more in-depth, well-rounded politics:

1. Capitalism is about infinite growth.

Capitalism, as described here by David Harvey, is a system in which capitalists use money to make more money. Put another way, there has to be more value at the end of the day than at the start of the day. Without more value being created at the end of the day, a profit cannot be realised – and capitalism ceases to operate. For example, if it costs me £1 to make a loaf of bread but I can only sell it for £1 or less, no extra value or profit is being made. You don’t need to watch Dragon’s Den to understand there is a problem here. In order for capitalism to maintain itself, it requires constant expansion and infinite growth. That’s why it consistently demands more from us, and the planet…

2. Infinite Growth is incompatible with our finite planet.

In recognition of the above, this is a somewhat unavoidable conclusion that plainly informs us of the unsustainability of our present system.  We’re probably all familiar with the Native American saying:

When the last tree has been cut down,

The last fish caught, the last river poisoned,

Only then will we realise,

That one cannot eat money.

You may have seen it being regurgitated by the turquoise talent of David Icke (without mentioning capitalism) or by everyone’s ‘favourite’ anti-establishment, police-loving thespian Russell Brand. Simply put, care for the sustainability of our environment, and everything that lives within it, is a sentiment incompatible with a continuing capitalist system that needs growth. For this reason there is no ‘Green capitalism’.

3. Use and exchange values.

Karl Marx noted that commodities produced under capitalism have a use value and an exchange value. Simplified, the use value is a thing’s actual use or usefulness and the exchange value is its value as most often represented in the money form (pounds, euros, dollars, etc). We are frequently told that prioritising markets and market competition is the most efficient way for the mass of the people to gain access to use value of things. In other words, competing capitalists seeking profits from exchange values is the best way to provide for everyone’s needs (even if the state has to subsidise them with public money). The triumph of this ideology, a certain type of capitalism, can be observed almost totally worldwide and is often simply referred to as: neoliberalism.

4. Capitalism as deprivation.

The maintenance of the scarcity of a commodity is a factor which determines all commodities’ exchange values. An abundance of diamonds, like all commodities, would be extremely detrimental to their exchange value – they would be ‘worth’ less because there are lots of them. This means that when a large abundance of diamonds are mined it could potentially be in the interest of capitalists – seeking profits from high exchange values – to hoard diamond hauls, buy diamonds, or to create a monopoly via mergers (see: De Beers). Of course, these are methods which undermine competition but, under all circumstances, how can we think the profit motive – bound to a system of infinite growth – is an intelligent way to manage our diminishing resources?

Currently, the falling price of oil has been attributed to a global drop in demand for its use, which is not being coupled with a drop in global production/supply. An abundance of oil, relative to the demand for it, is detrimental to its exchange value. This simply means abundant oil sees cheaper fuel for those who seek its use value but shrinking exchange values and profits for capitalists who sell it. Sounds great for us, right? Not quite – falling prices are problematic for growth when occurring in multiple sectors. As we know growth is a requirement for a continuing capitalism; shrinking growth means less money, less economic activity, fewer jobs, higher unemployment, more poverty and more deprivation.

Wouldn’t a system prioritising the delivery of use values, in a sustainable way, be better applied to all things? Considering we could power the whole of Europe and North Africa solely by harvesting the solar energy of the sun, would burning fossil fuels really be a part of any truly efficient outcomes?

Lastly, we can all testify that oxygen doesn’t have an exchange value because it is so abundant, but it certainly has use value; it keeps us alive. We are using oxygen without capitalists selling it to us via an exchange value mechanism! Rejoice! We all can access its use value due to its overwhelming abundance. Even the most apolitical utterance “if they could sell us the air we breathe, they would” is an acknowledgement of a system which feeds on this potential deprivation.

5. How does this relate to the housing crisis?

A property’s use value is all the things it is useful for: providing shelter, a space to socialise, raising a family, somewhere to cook, wash, sleep, etc. Its exchange value is merely how much it costs.

Providing use values to the mass of people in terms of housing is permanently at odds with the exchange value mechanism. We all know property prices (exchange values) go up when more and more people’s need for homes are not being met. In the midst of a housing crisis in the UK, this has never been more obvious. The exchange value is maintained, and increases, through the lack of supply to meet demand. This is why our parents and grandparents have benefited greatly from government policy since the 1980s to retreat from building public housing. The prices of their homes have increased in conjunction with the lack of supply. Between 1975 and 2014, average house prices rose 126% in real terms.

So, when someone is looking to mortgage a property, they are interested in the exchange value being as reasonable and accessible as possible. However, upon successfully mortgaging a property, those sentiments are reversed. Once you have access to a property’s use value, you are now primarily interested in the maintenance and expansion of its exchange value. This is to the detriment of those looking for the security of a home, the very position of every homeowner the day before they receive their new keys.

Therefore, the housing market as a system prioritising exchange values, can never solve our housing crisis. It is the cause of it. And the gap between the haves and have-nots is widening. The number of homes lived in by owner-occupiers is falling. The number of people renting from private landlords now outstrips those in council and housing association homes for the first time. In just ten years more than half people under 40 will be living in properties owned by private landlords. Based on research by the Joseph Rowntree Foundation, by 2040 6m private renters will be living in poverty. This is the housing ladder – a frantic race to join the haves before indefinitely becoming a have-not.

6. Neoliberalism and inequality are inseparable.

Acknowledging the conclusions on the housing market alone, it easy to see how rising inequality would be a major characteristic of neoliberalism. And guess what? It is. According to the OECD “worldwide inequality is at its highest since records began” and Oxfam warned earlier this year that the top 1% will own more than the other 99% by 2016. When you are working full-time just to give 50%+ of your earnings to a landlord, who maintains their wealth at your expense, the mask of so called capitalist ‘meritocracy’ begins to slip. It should come as no surprise then that rent-seeking is also recognised as a significant contributor to the trend of growing inequality, and neoliberalism itself.

7. Technology can help us think beyond capitalism.

So, where everyone has access to use values, markets are limited or destroyed. However, a functioning capitalism requires the creation of new markets, and often the maintenance of existing ones, to maintain growth. As an example, the digital world has both created new markets and potentially destroyed old ones.

Information has become almost totally free to reproduce, and with its abundance it becomes very difficult for it to be commodified. If you’ve ever downloaded and watched a film or song without paying for it via Netflix, iTunes, Amazon or the like, then you have gained access to use values without an exchange value mechanism – with no market required! Citing collaborative ventures like Wikipedia and open-source software which means you can now use Stephen Hawking’s speech software for free, it is easier to comprehend Paul Mason’s notion that “information is inherently social” or the claim that information is “communistic in nature”. Information is constantly being exchanged in these spaces without markets. The technology is here, and with its reproduction costs at practically zero, there is potential for an abundance that everyone can access. To use and share it most efficiently –  like all things – we must continue to think beyond capitalism.

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Published 28th August 2015

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