30
Jun
09

Communism, Capitalism, and Competition

Capitalism is a lot like a game of monopoly. Brutal competition, endless buying and selling and trading, a massive luck factor, and above all, the only way you can “win” the game is if everyone else loses. It’s survival of the fittest where only the most lucky and savage win- anyone else is crushed like the grass between two charging elephants.

So it is with our Capitalist system- though to get a capitalist to admit it is far from easy. Take Henry Ford, for example. Henry Ford is popularly credited with stating “There is but one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”.

This statement, of course, is vile propaganda- pure and simple. Unless a monopoly controls the product in question, the profit that can be made off selling said good is reduced dramatically. In simpler terms “Since the purpose of Capitalism is to get the most money possible, increasing the quality of a certain good (which would cost more to make), lowering the cost of that good (reducing the immediate profit), and paying the highest possible wages to those making the good (increasing the cost of production even more) all lower the profit, then the application of Henry Ford’s quote would defeat the purpose of going into business in the first place.

And Henry Ford knew this. Ford’s genius was by no means limited to his inventive or economic prowess. Ford was also a brilliant wordsmith who could appear to say one thing, when in reality he was affirming the opposite. “People can have the Model-T in any color, so long as it’s black” is one of his better known quotes. Technically the “Do what you want (provided that it’s what I want)” statement isn’t a logical fallacy. There isn’t any contradiction- just a clause. The equivalent would be a TV advertisement promising to “cover all medical expenses”. While some healthy, attractive (and well-paid) actor is making these promises, for a brief moment at the bottom of the screen, some fine print letters appear to inform you that the service or product will “cover all medical expenses” except a long list of expenses. When Henry Ford made his statement about the goal of industrialists, one must remember to keep the emphasis on the repeated word “possible”. Possible can mean any number of things or situations. “Possible without violating moral standards”, “possible without charging over one US dollar”, “possible without actually hurting the profit you make”, and so on, though the last “possible” is the most probable. Ford made both a fortune off of his industry and appeared to the public of his time to be a generous, witty, and fair-playing man (and that reputation lasts to this day, the vast majority of Americans being uninformed of Henry Ford’s virulent anti-Semitic and anti-immigrant views).

And that’s the way it is with Capitalism. Every corporation or company or individual with a product to sell or a service to hire out follows the Capitalist doctrine of profit (by any means possible). Like a player in the game of monopoly, the capitalist attempts to make the best quality of good possible (possible meaning “just superior to everyone else’s product to be more marketable) at the lowest cost possible (possible meaning “just enough lower than the competitor’s product to be more marketable), paying the highest wages possible (possible meaning “just high enough to tempt employees away from the competition”).

Now one might be fooled into thinking that this is somehow good- that competition will inevitably raise quality and wages, and lower the price of the product. A nice illusion- but it simply isn’t true. Corporations will raise and lower their prices and raise the quality of their product or service but rarely at the same time! If one corporation lowers the price of it’s product by ten cents, the competing company has the option of trying to undercut the new price or attempt to raise the quality of their product. “Quality”, however, is a tricky word. “Quality” might mean anything from a new toothpaste formula to a brighter toothpaste tube cover. The company might boast “new, brighter, better!” but since all of these words are totally relative, the don’t really mean much of anything. Sure one company could sell toothpaste for less and another could maintain the same price but promise “whitening power” but in the end, the goal of both companies is to make a profit. They’ll only undercut and outdo each other to a certain extent. As for paying higher wages- that part of Ford’s statement no longer applies. In this time of globalization, corporations can sell products in the West and manufacture them in the third world, where the workers are so destitute that they’ll take whatever job they can get- even working sixteen hours for a dollar a day. Corporations have a stranglehold on these people and since there’s more than enough cheap labor to go around, no reason to raise the wage (or provide healthcare or pensions, for that matter). Additionally, corporations- already locked in a barbaric struggle with each other- have no desire for new competition to enter into the market. Small businesses can be bought out by larger ones. Unless working on a very local level, small (and often family-owned) industries have no way of competing with larger ones (take, for example, the extermination of so-called “mom-and-pop” stores by massive chains such as Wal-Mart and Target). “So some small, private stores went out of business- that’s part of the free market system!” one might argue, “If these companies can give me lower priced goods, why should I complain?”. The answer is simple- the price isn’t lower. If you work for a company that makes a product (shoes, let’s say) you might be led to believe that the shoes you make are being sold to corporations like Target. Actually, Target is getting shoes from a sweat-shop in Taiwan for a fraction of the price your company’s selling them at. Your company, unable to compete with virtual slave-labor, is forced to lay-off thousands of employees (including you) because it can’t sell shoes for the same price. “But I don’t make shoes! It’s not my problem!” you might retort. But keep in mind that stores like Target, Wal-Mart, and so on are selling virtually everything now, from toothbrushes to garden fertilizer to suites to frozen turkeys to optometrist appointments. Whatever you’re manufacturing- whatever product or service you sell- you can bet that a massive corporation is selling it for less.

How’s competition sound now?

And that’s only how competition affects you. Imagine that you own a business and you’ve successfully run the competition into the ground. That’s great for you but what about everyone who’s just been put out of business? They’ve been forced to compete with each other for whatever jobs are available, no matter how low paying or exhausting those might be. And what about their families? If the daughter of one of the recently laid-off workers comes down with some disease, her family won’t have the medical insurance to pay for her treatment. Are we really part of such an egocentric society that the suffering we cause to others is justified as “part of the system”? Are we so obsessed with this “survival-of-the-fittest” economy that every moment of life is a vicious struggle to stay at the top of the food chain?

I propose an alternative: Communism.

As legendary economist John Maynard Keynes once put it “Capitalism is the astounding belief that the most wickedest of men, will do the most wickedest of things for the greatest good of everyone.”. Since we have seen that the good of the individual is not equivalent to the good of society (in most cases, it’s detrimental) I submit that we try the reverse. By cooperating, rather than competing, we can ensure that everyone is provided for, that the wages are fair, and that quality is controlled by the consumer, rather than the corporation. Sure some people won’t rise to the top, but at the same time, we can prevent anyone from being trampled below.

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7 Responses to “Communism, Capitalism, and Competition”


  1. 1 desertexile
    July 1, 2009 at 11:36 pm

    From your article, it seems to me that the most disagreeable aspects of the Capitalist system manifest themselves when an economy is dominated by giant, multi-national corporations. These huge companies are in the best position to exploit a vast number of workers and concentrate more and more of the wealth of a country in the hands of a small number of already-wealthy individuals.

    “They’ll only undercut and outdo each other to a certain extent.”

    This observation really only works when you’re talking about multi-nationals. The smaller the number of producers in a given market, the more likely that implicit collusion in price-setting will occur. (Explicit collusion is illegal, although it is also more likely to happen in markets dominated by oligarchies.) Of course, the Capitalist system naturally favors large corporations, since they are more efficient. But wouldn’t the problem be solved by a more concerted effort on the part of the government to break down multi-nationals into smaller, more localized entities? I’m no economist, and I have no idea what the implications would be for scientific research and innovation, which benefit from centralized industry. But wouldn’t it be better to work to improve the lives of all citizens, rather than creating ever more technologically-advanced, expensive and luxurious products for an elite group of the wealthy?

    I would argue that Marx’s Communist Manifesto was published partially as a reaction to such worker and consumer exploitation. Several decades into the Industrial Revolution, Europe’s cities were plagued by a cancerous growth of slums and factories. Crime was skyrocketing, the structure of the family was breaking down under the weight of increased alcoholism, prostitution, exploitation, and pure despair. Workers were being exploited to unbelievable lengths.

    Needless to say, things have gotten better for workers in those countries. Social movements (such as Communism) and workers’ rights movements have, seemingly against all odds, wrested power from the hands of millionaires and “robber barons,” winning a degree of protection for workers. Granted, there is still a ways to go and battles to be fought. But we have at least started on the path.

    What has happened in the process, however, is that now the rich, industrialized countries of the Western world are exploiting underdeveloped countries in Latin America, Africa and Asia. A new dynasty of “robber barons” has been created – this time with entire nations dominating other nations. Or rather, rich individuals have found a “loophole” to worker’s rights and now exploit poor individuals in countries other than their own. I have a feeling that that’s really where the new confrontation between Capitalism and your Communism will be played out.

  2. July 5, 2009 at 2:26 pm

    I happen to be in Bangkok, Thailand right now on R&R. I wish you were here. If you were here, you would see a city bigger and more populous than Chicago with more skyscrapers, more highways, more suspension bridges, and probably more runways. Bangkok has the world’s tallest air traffic control tower, a comprehensive public transit system, its own stock exchange, and a health care system of first-world quality. (There are Americans coming to Thailand for health care because of the superb level of service and the non-astronomical rates.)

    Progress has not been without its hiccups; in 1997 this city saw the world’s biggest traffic jam, as individual wealth outran the infrastructure and people bought cars faster than the government could build roads. That was a problem, but it was the good kind of problem. Additional roads have since been built. The poor– there are always poor– do okay here. My daughter’s friends are a pair of street urchins named Gik and Dam. They live with their family in a corrugated shack. That’s less than ideal but they also get free education and they are not hurting for food or care. Their parents are construction workers and I can personally confirm that they work about eight hours a day, five or six days a week. I know this because they are building a house on our street and I see them everyday.

    So, this idea that Asia is full of robber-baron sweatshops and exploited people desperate to work 16 hour days for a dollar a day is a gross exageration. The people here live in air-conditioned homes with internet and cable TV, and late-model cars parked in their driveways. A lot of them have college degrees and speak multiple languages and work in gleaming skyscrapers. Those who don’t– my brother-in-law the taxi driver, for example– enjoy a quality of life virtually indistinguishable from what they would have in the U.S.

    (I’m writing this on my niece’s computer. She finished college a few years ago and now she’s a logistics manager for an international shipping company downtown.)

  3. 3 trotskyite
    July 7, 2009 at 9:18 pm

    I’ve been to Thailand (though mostly in the north) and yes, it has done well for itself. Compared to some neighboring countries, it’s done an amazing job of keeping money and resources within the country. At the same time, one must admit that the sex-trade in Thailand has been exacerbated by Capitalism (or indeed, caused by Capitalism).

    Is Asia filled with “robber-barons”? Of course not. I’d submit that the majority of these tycoons live in the West, and merely use cheap labor available elsewhere (take GAP’s alleged sweatshops in India, for example).

  4. July 8, 2009 at 12:14 am

    “At the same time, one must admit that the sex-trade in Thailand has been exacerbated by Capitalism (or indeed, caused by Capitalism).”

    Oh? How do you figure?

  5. 5 trotskyite
    July 8, 2009 at 7:04 am

    Essentially, prostitution is a paid service- a “product” to be bought and sold. Capitalism is an economic system where the end goal is capital (money)- those involved in the prostitution business- with the exception of slaves- are in it for the money. Remove the profit (capital), and the industry shrivels away.

    I submit that the sex-trade in Thailand has been exacerbated by Capitalism due to two reasons: (1) from everything I’ve seen in Thailand, a hefty percent of those “buying” the product are tourists (Please don’t misunderstand me- Thailand is a great country and well worth visiting). (2) I find it unlikely that the tourism industry would be encouraged if no profit was made off of tourists. Therefore, I must conclude that Capitalism is both directly and indirectly responsible for the sex-trade, firstly in that a profit can be made from prostitution and secondly in that the government, in an attempt to generate revenue, increases the number of tourists visiting Thailand and (inadvertently) increases the number of those willing to pay for prostitutes (again, please don’t misunderstand me- I am by no means condemning prostitutes- in my own opinion the majority seem to be driven to the sex-trade as a last resort).

  6. September 9, 2009 at 4:24 am

    Comrades,

    If we self identify as revolutionary marxists of the trotskyist tradition we have an obligation to build a revolutionary party and international. To do that we need to clarify our differences with existing currents and if common methodology and program are arrived at we are obligated to commence joint practical work and work toward fusion. That said our circle the Humanists for Revolutionary Socialism has fused with the International Leninist Trotskyist Fraction. The points of unity and resolutions of the founding congress are found at our web site. Links to our international co-thinkers are also found there as well as significant documents from our history and trajectory. We invite all serious revolutionaries to engage us in discussion, honest revolutionaries will seek the best program for the working class that will either unite us or educate the vanguard through the process or both.

    Communist Greetings,

    cuzzin charlie

  7. 7 trotskyite
    September 9, 2009 at 12:47 pm

    Thanks Comrade…


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