Posts Tagged ‘profit

07
Jul
10

Norman Rockwell’s America (is Dead)

If you’re familiar at all with contemporary art, then you’ll no doubt have heard of Norman Rockwell. Indeed, chances are if you’ve lived anywhere in the West you’ll have come across one of his iconic paintings (as an original or as a recreation). For the few of you who might not be aware of his work, Norman Rockwell created paintings depicting (most often) bourgeoisie life in idyllic Middle-America*. There’s the family farms and small, private businesses that politicians love to talk about (see Sarah Palin’s “Real America” speech) and Capitalism tries to market to you (see ‘Aunt Jemimah’, ‘Uncle Ben’, ‘Quaker Oats’, ‘State Farm‘, ‘Pepperidge Farm‘ etc.). For many it’s the very face of Capitalism- just look at this 1948 “instructional” video of (exclusively white) high-school teens discussing Capitalism.

Coronet Instructional Films “What Is Capitalism?”, 1948

This is a prime example of the twisted understanding of Capitalism many have, but even in this video we can see the roots of the disparity between the Rockwellian portrayal of Capitalism and the harsh reality. Throughout the film, one word stands out: Competition. The young woman to Jimmy’s right describes how the shop-owner, Mr. Brown, agrees to lend out his truck to ensure she and Jimmy buy from him, rather than the competition. She asserts that Mr. Brown’s interests aren’t in providing service but in making a profit, and it is here we have the crux of the matter. Mr. Brown wants to make profit- the sole existence of his business is to make profit, and so Mr. Brown does whatever he can to ensure his merchandise is sold, rather than the merchandise of his competitors. In short, Mr. Brown is trying to run the other shops in the community out of business to maximize his profits. I’m not arguing that Mr. Brown is morally corrupt (though let’s not rule out of the possibility), we have to understand that in a Capitalist system, the rules of competition apply to everyone. Mr. Brown has to run his competition out or his competition will run him out. Eat or be eaten. At the same time, if Mr. Brown is indeed concerned not with his own livelihood but with his profits, if he does succeed in running his competition out of business he will have a monopoly and Jimmy and his friends will be forced to buy “weenies” at whatever price Mr. Brown sets.

Melodramatic? Consider this:

Starbucks was a small, privately owned coffee shop that has burst into a world-wide empire that has obliterated competition. Walmart also started as a small shopping center before expanding to the point where it has replaced nearly all beloved mom-and-pop stores you see in Rockwell’s art. McDonalds didn’t start out was a global food-chain but just as a privately owned restaurant. Coca-Cola started out as a tonic.

Now of course, there’s the temptation to side with corporations on this issue. One might argue ‘Hey, the fact is that Starbucks, Walmart, and other stores became economic empires by being better than the competition- they deserve the power they have!’. This argument forgets, however, that most corporations don’t get to where they are by simply having better products. The Mr. Brown of the video might run his competition out of business by offering lower prices by (1) temporarily lowering his prices so that his competition will be destroyed and he will make more money in the long run, (2) lowering the quality of his goods, (3) smearing competitors (and if you don’t think this happens, look up a Mac vs PC commercial), (4) lowering the wages of his workers, (5) sabotaging his competitors (corporate espionage), (6) convincing the public that his products are better (actually making them better would decrease profit), or even (7) collaborating with other businesses to harm competition (just look up the tactics of J.D. Rockefeller). Now out of these seven options, do you think that Mr. Brown is going to go with the one that lowers his immediate income? And what happens when Mr. Brown gets a monopoly? Is he going to lose his customers to cheaper options in other towns? Of course not- the astute Mr. Brown is going to open a shop there, and use his profits to undersell his competitors into working for him.

It’s a sad but simple fact. No matter how much we swear by the good, ol’ family farm or shop, small businesses inevitably become big businesses, which become global corporations with a reputation for low prices and even lower wages, product safety standards, and environmental consciousness. To answer the question of the video, what is Capitalism? This is Capitalism: pointless competition, exploitation, monopolization, and the general degradation of all the values we see in Norman Rockwell’s paintings.

*Admittedly, he did do a few pictures of working class Americans and even school children in Soviet Russia- but overwhelmingly his paintings were of the bourgeoisie.

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06
Jun
10

[Not] Free to Choose

Despite a growing dissatisfaction with Capitalism, there are many who refuse the concept of doing away with the system altogether. Such individuals tend to advocate “happy mediums” between free market Capitalism and state regulation. For example, the 2009 documentary Food, Inc. attempted to expose issues within the American food industry. While the film was highly critical of the some major food corporations in the US and the general way the industry is set up, the film advocated not the abolition of the Capitalist system that has allowed the situation to come to be, but rather the idea that through selective consumption, the food industry will be forced to alter its practices and products. For example, in this new system, one would choose to buy only “green” products, showing corporations that (1) the consumers will no longer buy ecologically harmful products and (2) there’s a profit to be made by selling eco-friendly merchandise.

It’s a painfully flawed system.

First, we must recognize the central role profits play. A product that is eco-friendly, made well, and made by laborers who are being paid decent wages is going to be substantially more expensive than a product that is made with no regard to the environment, the health/well-being of the consumer, and made by sweatshop workers. Products that have the qualities of the former are either too expensive to be profitable (enough) for the corporations producing them or too expensive to be purchasable by the majority of consumers. While there is some degree of public choice involved, overwhelmingly other factors such as the poverty of the consumers make this system impossible to realize.

Second, we must understand that Capitalism is in no way, shape, or form a democratic system. A while back, I had a conversation about Capitalism’s displacement (and to a degree, eradication) of local cultures. The person arguing with me made that claim that if the people of a country didn’t want McDonalds springing up across their nation, they would have only to stop eating there and the McDonalds, seeing no profit, would withdraw. The issue with this is that even if 95% of a population is against there being a product sold, if the remaining 5% buys enough to allow the company to make a profit, they will keep selling.

To recap the situation, product A is bad but cheap, product B is good but expensive, you will probably only be able to afford product A, and even if you manage to purchase product B, your ability to purchase other good products like B will be reduced because B is still expensive. But if you were somehow to rally the public and declare a boycott of product A, the fact that you’ve managed to get 75% of the populace to stop buying A doesn’t mean that A will cease to be a source of revenue. Short of getting a universal ban on product A, there’s not a whole lot you can do.

Now don’t misunderstand this post- I’m not arguing that because you don’t have much choice, you should capitulate to unethical business practices. On the contrary, out of principal, when it is your choice, you ought to spend money on the eco-friendly, fair-trade products rather than harmful or slave-labor products. I’m merely showing that Capitalism cannot be controlled by popular choice. Capitalism cannot be moderated so long as it remains based entirely on the acquisition of capital– and any change to this- the most fundamental aspect of Capitalism- would be an abolition of the Capitalist system altogether.

If you’re not free to choose within Capitalism, maybe you ought to considering choosing something other than Capitalism.

30
May
10

Communsim, the Environment, and the BP Oil Spill Disaster

While the BP oil spill nothing short of an ecological tragedy, I can’t help feel a tiny bit grateful for it. Like any disaster, despite the overall harm, there’s still a lesson to be learned from it. In the case of the oil spill, the lesson is this:

Capitalism and Environmentalism mix about as well as oil and water.

As has been discussed many times before in this blog, Capitalism’s primary function is the acquisition of Capital– money. It’s not the greater good of humanity, it’s not the advancement of one’s nation, and it’s certainly not the defense of the planet. It’s about cold, hard cash- nothing else. Of course one could argue that there’s money to be made in advancement of one’s nation or the defense of the planet, but precious little compared to that of the simple exploitation of the earth.

Now this is not the first time BP has been implicated in faulty safety measures that have resulted in an oil spill. In 2006, in Prudhoe Bay, Alaska, over a quarter million gallons of oil was spilled as a result of BP maintenance cost-cuts. Why cut maintenance costs? To increase profit of course. The higher the profit, the more the Capital– the entire point of Capitalism. So what if it’s dangerous to the local ecosystem? Capitalism is about profit- it’s about keeping the investors happy and the product(s) flying off the shelves. Now one might argue that people want to buy from eco-friendly companies (the entire issue of participatory economics will be dealt with in another post), but in general the trick is simply not getting caught damaging the environment. Really all the same principles behind the exploitation of the laborer apply to the exploitation of the earth. Making sure one’s equipment is up-to-date and functioning safely is costly, you want higher profits, cut back on clean waste disposal for cheap, (and almost inevitably) environmentally damaging) options. Rather than worry about the long-term implications of the effects of one of your products (herbicides, let’s say), make sure people just focus on the fact that it kills weeds in seconds rather than the fact that it does serious damage to the soil. As I’ve said before, it’s about the money, not the potential damage.

Now I’m not trying to argue that every product on the shelves right now has been made in such a way to maximize profits at the expense of environmental welfare. I’m pointing out that the potential is there, that Capitalists have no real reason to attempt to make their products environmentally safe (other than higher profit, of course), and that there are many, many instances of this happening- the BP oil spills being prime examples.

A strong-counter argument to this would be that, to an extent, the same rationale of “profit-before-environment” can be applied to a situation where a factor/mine/rig/etc. is owned by the local public (a major tenet of Communism), rather than a handful of individuals (the foundation of Capitalism). Sure, if the public living in and around the Bay of Mexico owned and operated the rig themselves, there’d still probably be the temptation to cut costs/manpower/time in ensuring the rig is environmentally safe, but if there was an oil spill as a result, the local communities controlling the rig would be the ones chiefly affected by the disaster and would have no one to blame but themselves. But instead of this fair and just ‘you-do-it-you-clean-it-up’ system, we have Capitalism. A man or company can own a rig on the other side of the world, profit off it, and never have to worry about waking up to dead seagulls and black tar in their yards. Now you can call me idealistic, but I can’t help but feel it a bit unjust that someone can be responsible for a major ecological, economic, and sociological disaster and never have to deal with the consequences. The reason I said “there’d still probably be the temptation to cut costs” earlier on was because one tends to have a differently mentality when dealing with something like this. Imagine you’ve been given the job of keeping bears off of an acre of land hundreds, no- thousands, of miles away. Chances are you’re going to be a lot less careful about keeping bears away than if you actually had to live on that acre and would be directly affected. Marx talks quite a bit about the estrangement of labor, but he mentions the estrangement of property as well.

Let’s face the facts. Capitalism is not going to solve our environmental problems (and even if you’re among the few who don’t believe in global warming, you have to acknowledge we’ve got some serious pollution and deforestation issues), and in all likelihood, Capitalism and Environmentalism are going to be at odds. The way the Communists see it, we can’t live without the environment- we’re more than happy to live without Capitalism!

03
Apr
10

Live Long and Prosper?

If you were to look up “Communism” in a philosophy book, you’d probably find it under a section dealing with “Materialism”. The problem with this is that the popular meaning of the word “Materialism” has changed radically over the years. In terms of philosophy, the original meaning of “Materialism” was a category of philosophies primarily concerned with the concepts of property and their effects on human society/history. If I were, however, to use the term “Materialist” today, it would commonly be assumed that I was referring to the idea that the end goal of life is to accumulate wealth (radical hedonism, essentially). This is a recurring problem with many terms connected to Communism- in Marx’s day, “Socialism” meant a society embracing shared property and rejecting the class system, today we use it to refer to a politico-economic system where the majority of property is owned and managed by a massive government- but perhaps that’s off topic.

The issue with trying to categorize Communism in philosophy is that Marx was rather critical of philosophy as a whole. He asserted that analyzing the world should not be an end but merely a means to bring about change and advancement (“Philosophers have merely interpreted the world. The point, however, is to change it!” -Karl Marx, “Theses on Feuerbach”). While Communism definitely does offer a socio-politico-economic perspective, to claim that Communism is an all-out philosophy wouldn’t be quite correct. While most philosophies make some basic assumptions about the purpose of life (hedonism, as much pleasure as possible; Socratic philosophy, preparing for death;  aesthetic realism, finding harmony in life; the list goes on and on), Communism on the other hand functions more like a scientific theory than a code of ethics or an understanding of existence (indeed, one of the reason people find Marx so hard to read is the fact that he treats economics almost like a branch of physics). Don’t misunderstand me- Marx did have convictions. He saw the exploitation of the proletariat as the principal factor in the toppling of Capitalism and the class system and believed that the toppling of the Capitalism and the class system would propagate justice and equality. It’s like a scientist discovering that running electricity through a gas filled bulb not only creates light but it is his moral imperative to run electricity through a gas filled bulb and create light. As a result of all this, you’ll find no single, coherent Communist philosophy but rather a number of philosophies espousing Communist political theory. On one side you have philanthropic, altruistic humanist communists who have become Communist out of love for their fellow man. On the other side you have cynical and bitter antisocial communists who have become Communist out of a belief in morality rather than man (the author falls into this category). And between these two extremes you’ll find any number of other philosophies- religious Communism, green Communism, Anarcho-Communism, etc. If there’s a mainstream philosophy out there, you’d be safe to bet that there’s a Communist version of it (baring, perhaps, Ayn Rand-style Objectivism).

Now one might argue that the exact same rules apply to Capitalism. “Capitalism is a socio-economic theory too. You can hold any philosophy or worldview and still be a Capitalist!”.

Now this is partly true. You can indeed be a Capitalist and hold the purpose in life to protect and preserve the earth and all its natural wonders. The problem is that if you also accept Capitalism, you have to maintain that it is perfectly legal (and indeed, a basic human right) to purchase a mountain, to prevent anyone else from walking on it, and if the owner so chooses, to blow it to pieces.

“Alright, so Environmentalism and Capitalism don’t mesh so well- but there’s still a ton of other philosophies out there.”

Absolutely, and they too don’t seem to mesh well with Capitalism. If you hold the purpose of life is to live honestly and decently, then you’re presented with a number of challenges (the primary of which is that in Capitalism, the highest profits come from underpaying and overworking your employees and overpricing your products- not exactly honest or decent, is it?). If you declare that the end goal in life is to live long and prosper and see your family happy and secure then you have to deal with the fact that this is the wish of not only you but a large percent of humanity and since in Capitalism there’s only so much room at the top you’ll have to viciously compete with your neighbors for this lifestyle (unless you’re born into it, in which case you just have to worry about the huddled masses eying your house and pool. Even if you believe that the sole purpose of live is to live in decadence and luxury, you have to contend with the very definitions of the words. Do two houses in Monaco count as decadence and luxury, or should you get a yacht as well (or more importantly, will you be any more happy and fulfilled with the yacht than you are now?).

So essentially, no matter what your philosophy is, it has to be accepted that in all likelihood, you’d be able to pursue it better in a society free from Capitalism. You want peace and happiness for your family? Maybe you should opt for a system where a starving homeless man is going to gun down your wife/husband for her/his necklace/wallet. You want to be able to do whatever you love doing? Maybe you should opt for a system where you aren’t forced to take whatever job pays the bills, no matter how painful or bland. You want to be able learn everything there is to know about a subject? Maybe you should opt for a system where education is a high-priced commodity available only to some.

Maybe you should opt for Communism.

18
Feb
10

The Trickle-Down Theory

Though it the term originated in the 1930s, the “Trickle-Down Theory” has come into increasing use over the past year (largely due to the global financial meltdown). Essentially, the theory holds that by cutting taxes on the wealthy and/or allocating wealth to the upper classes, the money they save will be spent on luxury items that will provide work and profits to the middle class, who in turn will buy products that provide work and profits to the working class.

Obviously, this theory is complete and utter tripe.

Firstly, the theory is based on the assumption that the items the wealthy buy will somehow benefit the middle-class. In reality however, when an oil tycoon buys a diamond necklace for his wife, he isn’t benefiting anyone. If he walks into a store to buy the necklace, is he somehow benefitting the clerk behind the counter? Of course not- her wages are the same whether or not he buys anything. The profits of the sale go to the diamond magnates who own the store. In short, the wealthy get wealthier- the middle class simply facilitates the process.

Now you might say, “Hey, doesn’t the oil tycoon’s purchase help the middle-class? Without customers, the store couldn’t operate and the clerk would be out of a job! And if the clerk is out of a job, she isn’t going to be able to spend money and produce profit for the working class!”. Now that’s partly true- but only partly. The clerk’s job does depend on the store being successful, however, let’s look at the big picture. If the store is already running, then it has enough business to provide the job. Whether the tycoon has a few extra thousand dollars isn’t going to make the slightest difference. Again, you might argue “But an increase in the demand for diamonds means that more diamonds must be mined, producing work and profits for the proletariat!”. Again, this is only partly true. Now if there was a massive increase in the demand for diamonds (and let’s face it, it’s not like diamonds wear out and need to be bought by the dozen), there would indeed be more work for the proletariat. There’d be more work, not more profit. The owners of the mines can simply increase the workload- they have no reason to increase wages. Unionizing? The majority of the world’s diamonds are mined in third world countries where (1) unionizers can be beaten, tortured, or killed and where (2) the general populace is so poor they’ll take whatever wages they can get. In short, an increase in wealth for the wealthy does not equate an increase in wealth for the entire social system.

Ok, maybe that isn’t entirely true. There are certain (rare) situations in which the trickle-down theory seems to work (which brings us to the second issue). Imagine a wealthy man decides to build a sports stadium- the advocates of the trickle-down theory will argue that this will provide jobs and profits for the local community. Now this will in fact provide jobs- as food vendors and janitors. Whatever extra money they have will be spent on things too insignificant to boost the community out of poverty. I wouldn’t call that “benefiting” the working class anymore than I would call a dew-drop in the Sahara a “water-supply”.

Now I’ve stated that the origin of the term “trickle-down theory” originated in the 30s- but the actual practice has been going on since the beginning of time. It’s what they used to do with hunting dogs. Sic them on rabbits and, after the dogs catches the prey, they wait patiently under the table while the master eats the meat. When the master’s done, he throws the scraps to them. Now it might work for dogs, but if you treat a human like an animal, then it is only a matter of time before he becomes one- and an animal and has no issue with ripping your throat out.

31
Oct
09

What Would Jesus Buy?

Today is Halloween, formerly All-Saint’s Day Eve, formerly Samain Night. The origins of the holiday aren’t important- like many Christian celebrations, it combined local traditions (in this case, the Celtic equivalent of Dias de los Muertos) with elements of Christianity. What happened nearly two thousand years ago has happened again, though this time it isn’t a case of one religion attempting to exploit another- it’s Capitalism attempting to exploit religion.

Now you’ll have heard these kinds of arguments before- Christmas has become too materialistic, Valentine’s Day is just about consumerism, and so on. Let’s face it- it’s true. Capitalism, as it always does, attempts to take advantage of whatever situation and profit from it. The problem with this in the case of religious holidays is that consumerism and religion simply do not mix.

Take Valentine’s Day for example. While there are several differing accounts, most records agree that Valentine was a third-century Christian priest who was executed by the Emperor Claudius for proselytizing. According to legend, Valentine sent his friends and supporters letters and flowers while he was imprisoned, a tradition that eventually evolved (or devolved, according to your opinion) to the exchange of romantic notes and roses today (though most stories assert that Valentine sent crocuses- but that’s off topic). Here you can see the problem for Capitalists: profiting off of historical religious intolerance isn’t exactly easy. So Capitalists came up with the idea to pervert the holiday and change it from a memorial of a saint to a day of obligated romance. As you can imagine, there’s a lot more money off of over-priced chocolates, perfumes, roses, and red construction paper than there is in the general appreciation of fellow members of your faith. The same could be said about Christmas, Thanksgiving, Mardi Gras (believe it or not, it started as a religious event), Easter, and to a lesser extent, Hanukkah and Ramadan.

So why would this matter to Communism? Doesn’t Communism claim that religion is simply the “opiate of the people”? The answer is both yes and no- interpretations vary and Communists are by no means united on what exactly Marxism’s stance on religion is- but that’s all irrelevant. My purpose here is to demonstrate that Capitalism will profit off of anything, no matter the origin or purpose. The very days and events meant to celebrate anti-materialism, community, and spirituality are warped into being the epitome of gluttonous consumerism, self-centeredness, and wasteful excess. If nothing else can convince you of the twistedness of Capitalism- this will. Capitalism is making (and with great success) an attempt to infiltrate and dominate religious holidays- it’s only a matter of time before they target religion.

So I guess what I’m trying to communicate is this. Ask yourself, the next time you’re confronted with a ten-dollar bag of stale candy; a garish, plastic snowman lawn-ornament; or carton of foul-tasting chocolate bunnies; what would Jesus buy?

22
Jul
09

Professional Amateurs

The word “amateur” is derived from the Latin word “Amo” meaning “to love”. We use “amateur” to describe someone who is doing something as a hobby or for fun, rather than being paid to do so. An amateur baseball player plays for the fun of it, a professional baseball player plays for a living.

One of the most common arguments against Communism is that by abolishing the class system, money, and private property, people will have no motivation to work hard (or work at all) since they have no chance of advancing their position in life. It is claimed that the only reason most people can put with their mindless, soul-crushing jobs is that they are being paid to work. They can then take their money, gradually move up through the ranks of society, and buy material goods that bring them comfort and happiness (though whether material goods actually make us any happier is a debate for another post). If we take all of this away, then why would anyone do anything?

The answer is quite simple: people will do almost anything for the love of doing it.

I’m a writer. I don’t get paid to write, I don’t move up through the ranks of society, I don’t buy things in an attempt to make myself more comfortable of happy. According to Capitalist logic, I shouldn’t be writing since I have no motive- no reason for doing so. Quite simply, this logic is flawed. Yes people will do almost anything for money- after all, the single purpose of Capitalism is money- but there are other motivations. People will do things because they are physically forced to do them (slavery), people will do things out of fear for their wellbeing or the wellbeing of others (extortion, blackmail), and people will do things because they love doing it. Of course, the greatest of these is love- after all, even when enslaved or extorted, people will do the least amount of work possible. When they are doing what they love doing, however, the activity doubles as the end goal. In these cases, they will do as much work as possible.

Take the example of Giotto Di Bondone. Born in the late 1260s in Tuscany, Giotto was a shepherd boy who taught himself to paint. He was not being paid and was not coerced in any way to paint, he painted simply because he enjoyed painting. One might describe him as an “amateur” and while that word today often connotes substandard, Giotto’s paintings were anything but inferior. Indeed, Giotto’s abilities were so impressive that legends spread claiming he could paint a picture of a ewe so realistic that a lamb would confuse it with its actual mother, and that Giotto could draw a perfect circle without the use of any device. In short, Giotto, an uneducated, untrained Tuscan peasant was as a child a better artist than the best-paid painter in Florence (of course, Giotto eventually was paid to paint, but the fact remains that he was a gifted and prolific painter even before he became a professional).

Now this opens up a world of possibilities.

What if we all did jobs according to our talents, rather than our need to pay the bills or desire to become “wealthy” (again, the concept of true wealth will be discussed later)? What if everyone who was skilled at painting, math, cooking, and speaking could become artists, mathematicians, chefs, and orators? If everyone could become what they are talented at (and I’ve yet to find a person who doesn’t enjoy his or her talents) then we would have more work accomplished at a higher quality. It is this that Communism attempts to achieve: “From each according to his abilities, to each according to his needs.”.

Of course, one might argue that Capitalism attempts to achieve this as well, but this is simply not true. Granted, there are a fortunate few who can pay the bills and do what they love, but in reality the cast majority of people aren’t so lucky. Thousands- no, millions– of would be inventors, mechanics, actors, politicians, farmers, athletes, cooks, designers, musicians, programmers, and composers never get to be anything more than day-laborers, waiters, drug dealers, prostitutes, and street-sweepers. Is it because they didn’t try hard enough? Possibly, there is a handful who are, quite simply, lazy. But to state that the millions of poor, the hungry, and homeless are the way they are out of choice is ridiculous. Most never had the money to pay for a decent education, preventing them from ever rising out of the gutter. Others are simply held back by bills and debt. Still others are simply unlucky, some unforgiving disaster reducing them to taking whatever work is available. In the Capitalist world, it takes every ounce of energy to keep your head above water, let alone find a job doing what you love to do.

Of course, that doesn’t stop us from trying. Some attempt to struggle through Capitalism to achieve their dream job, others turn their talents into hobbies, instead of careers, and still others- such as myself- attempt to bring about a system based on people doing what they love. The astronomer Galileo once commented that he did not “…believe the same God that would endow us with senses, reason, and intellect has intended us to forgoe their use…”. Like Galileo, I do not believe that humans, gifted with the talents to compose a beautiful symphony or sing like angels, are meant to push aside their skills to make room for their careers. Instead, let as all be professional amateurs.