How would _you define the problematique?

Dear wsn,

With all your good critiques and comments, I'm forced to
revise my material.  One of the trickiest issues to deal
with, I think, is to clarify what 'capitalism' is about, and
to treat 'capitalism' and 'elites' in a balanced way, as
related but distinct phenomena.  I doubt if you will all
agree with my attempt here, so blast away. Central to the
piece is the question "Can capitalism be significantly
reformed?"  As I deal with this question, you'll find
considerable new material. There is no mention of heirarchy
or decentralization, or movement structure, in this section
since that would be controversial, and is immaterial here.  
That topic will get its own section, and your
various comments will be very helpul.  I hope you will find
much to agree with here, but remember - this is not an academic
paper, but is intended for the general public.


cheers,
rkm

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   II.b. The revolutionary imperative

        "Governments are instituted among Men, deriving
        their just powers from the consent of the
        governed... whenever any Form of Government becomes
        destructive of these ends, it is the Right of the
        People to alter or to abolish it, and to institute
        a new Government, laying its foundation on such
        principles and organizing its power in such form,
        as to them shall seem most likely to effect their
        Safety and Happiness."
        - U.S. Declaration of Independence, 1776

        "Capitalism is the relentless accumulation of
        capital for the acquisition of profit. Capitalism
        is a carnivore. It cannot be made over into a
        herbivore without gutting it, i.e., abolishing it."
        - Warren Wagar, Professor of History, State
        University of New York at Binghamton

   According to mainstream consensus reality, 'capitalism' is
   the same as competitive free enterprise - and the only
   alternative to capitalism is centrally-planned state
   socialism. This is in fact nonsense. Free enterprise,
   competition, entrepreneurial endeavors, the pursuit of profit
   and wealth, international trade and specialization - these
   have all been part of human societies, in varying mixtures,
   for thousands of years. Socialism and capitalism, on the
   other hand, are both rather recent inventions. Capitalism
   didn't become significant until the late 1700s, when it
   emerged along with the Industrial Revolution in Britain.
   Socialism came along still later, as a reaction to the
   exploitations of capitalism. These two recent upstarts are
   not the only possible economic systems. Humanity got along
   without them both until only two centuries ago, and there are
   many other options available for us to choose from today.

   What distinguishes a _capitalist society is something very
   specific - a capitalist society relies on _private investors_
   to fund and manage its economy. The reasoning is that
   investors - as they pursue their own interests - will
   generate economic activity, create a healthy economy, and
   society will benefit. To some extent this is indeed what
   happens - but to the investor, the healthy economy and social
   benefit are only accidental by-products. What investors care
   about is _maximizing the return on their investments through
   economic activity.

   This pursuit of maximum returns led to the early and rapid
   evolution of the _stock corporation_ as the primary vehicle
   of capitalist operations. Such a corporation is a
   finely-tuned money-making machine, designed to deliver
   returns to its investors - and the primary mission of
   corporate management is always to maximize those returns.
   There are two ways investors can benefit from their stock
   ownership in a corporation. They can either take out a
   _profit stream_ (as dividends) or they can achieve a _capital
   gain_ (by selling their stock at a profit when it goes up in
   value).

   A common misperception is that capitalism is primarily about
   maximizing corporate profits. On the contrary - capitalists
   soon learned that maximizing their returns was better served
   by capital gains, than by ongoing profit streams. Early in
   the Industrial Revolution capitalists learned that wealth
   accumulation was best served by investing in new
   technologies, and in enterprises which showed promise of
   growth. Stock markets were soon developed so that investors
   could move their money easily from one corporation to
   another, chasing those corporations whose growth prospects
   seemed most promising. A rapidly growing company might not
   pay any dividends at all, and it might sell some products at
   a loss - as it expands its production capacity and seeks to
   capture markets. Investors who bought stock in a small,
   growing enterprise could multiply their capital many times
   over by selling their stock when the enterprise achieved
   major success and expansion. Dividends and profits were not
   the most effective way to accumulate wealth - growth
   investments were.

   As a result of tendencies such as these, a capitalist economy
   is always dependent on continual economic growth. If
   corporations generally stopped growing, then investors
   generally would try to sell their holdings - markets would
   collapse and the whole economy would come to a grinding halt.
   If growth isn't occurring, a capitalist economy doesn't
   merely slow down - it stops functioning altogether. The Great
   Depression of the 1930s was an example of such a collapse,
   and nothing short of a world war was able to get the system
   going again.

   With this background, I suggest we can now approach a
   question which is of crucial importance: "Can capitalism be
   significantly reformed?" Presumably, 'significant reform'
   would include things like major reductions in global warming,
   radical elimination of toxic pollution of food, air and
   water, prohibition of near-slave labor and child
   exploitation, a fair deal for poor countries, major
   reductions in our use of fossil fuels, etc. etc. What we must
   recognize, however, is that all of these 'bad things' are
   happening precisely because they each contribute in some way
   to economic growth. Carelessness with toxins, if permitted,
   reduces costs. High energy consumption is coupled with
   increased auto sales, and increased employment. Exploitation
   of labor in poor countries enables transnational
   manufacturers to decrease their costs and expand their
   markets. And so on.

   Capitalism can be compared to an automobile, and growth to
   its petrol (gasoline). If we want to use the automobile to
   get around, then we must provide petrol. Similarly, if we
   want to base our economies on capitalism, then we must permit
   growth - and the societal changes that go with it. To think
   we can reform away the growth or the changes, while retaining
   capitalism, would be like sitting behind the wheel of our car
   and expecting it to run on an empty tank.

   Perpetual economic growth is simply not compatible with a
   healthy environment nor with healthy societies. Growth
   requires always 'more' and 'new' - more resources, more
   markets, new kinds of products, more exploitation, new kinds
   of infrastructures. Growth itself is what needs to be
   'reformed' out of capitalism, and yet growth is the lifeblood
   of capitalism. Capitalism is our Shylock: we cannot extract
   the pound of flesh we require without killing the patient.

   What is required, quite simply, is that control over our
   economies and societies be taken out of the hands of private
   investors. Perhaps, for a century or so, the interests of
   ambitious investors and society were somewhat aligned, and
   benefits were enjoyed by many from the capitalist path. But
   now that the irresistible force of growth has met the
   immovable object of a finite life-support system, it is time
   to call a halt and reassess our options as a global
   community.

   When you think about it, there is very little to be said for
   the proposition that "Society shall run in such way that the
   wealthy can accumulate more wealth as rapidly as possible."
   And yet, that is exactly what it means to live in a
   capitalist society, where growth is always the economic
   imperative. And the extent to which we might regulate
   capitalism is precisely the extent to which we would hamper
   its functioning. In the end, as we have seen in the years
   since Reagan and Thatcher, the irresistible pressure of
   growth erodes all attempts at regulation. That's the nature
   of the beast. You can ride it, but you can't tame it, and it
   is always hungry.

   If we want to base our economies and societies on something
   other than growth, and to take control out of the hands of
   the ruling wealthy elite, then we are talking about changes
   which can only be described as revolutionary. 'Taking away
   control' will be a monumental revolutionary project of a
   political nature, but 'basing our economies and societies on
   something else' may turn out to be the more formidable
   project in the long run - and the one with the more
   revolutionary consequences.

   But I submit to you - these projects are both possible and
   necessary. The direction capitalism is taking us - as it must
   - is simply unacceptable. If we permit the elite regime to
   bring about their WTO-controlled Dark Millennium - a world in
   which we will make every sacrifice so that capital coffers
   can pile ever higher - then future generations will curse us.
   Now, while our nations still have some semblance of order and
   openness - this is the time to take our stand. Our prospects
   for success will only decline, as the regime consolidates its
   centralized systems. We must not be like the frog who waited
   too long to jump out of the cooking pot, sealing his fate
   through inaction.

   I suggest that we have several urgent projects before us, as
   a global community. We need to learn how to build the 'right
   kind' of movement and develop a strategy for victory on a
   global scale. We need to develop a common vision of what kind
   of world we want to create. We need to find a way to avoid
   chaos in the transition, and a way to arrange for a smooth
   process of transformation to sane, sustainable societies.
   Most of all we need to find a way to come together, somehow,
   as a global community and learn how to find our 'collective
   voice' as we approach these formidable yet necessary
   projects.

   This is the _revolutionary imperative_ - to join together as
   free men and women in these common endeavors. Either we stand
   together now, or we doom ourselves and our descendants -
   until who knows when - to living in societies that are too
   horrendous to contemplate. In science fiction we have
   experienced such nightmare worlds, and from this nightmare we
   could not awake. Our imperative is not for violent
   revolution, but for something even more revolutionary - to
   set humanity on a sane course using peaceful means. The
   current regime is serving the interests of only a tiny elite,
   the rest of us have nothing to lose but our chains - and we
   have a livable world to gain.

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