Difference between revisions of "criticisms of capitalism"

Revision as of 10:44, 9 July 2008

Capitalism has been criticized from many perspectives. Criticisms of capitalism come from different political ideologies and individuals.

Markets

The free market and property rights

According to Pierre-Joseph Proudhon and Friedrich Engels, the free market is not necessarily free, but weighted towards those who already own property.^[1][2] Capitalist regulations, including the enforcement of private property on land and exclusive rights to natural resources, unjustly enclose upon what should be owned by all, forcing those without property to sell their labor to capitalists and landlords in a market favorable to the latter, thus forcing workers to accept low wages in order to survive.^[3]

According to Proudhon, the emphasis on property is the problem. He stated that property is theft and leads to despotism:

"Now, property necessarily engenders despotism -- the government of caprice, the reign of libidinous pleasure. That is so clearly the essence of property that, to be convinced of it, one need but remember what it is, and observe what happens around him. Property is the right to use and abuse."^[2]

Mutualists and some anarchists support markets and private property, but not in their present form.^[4] According to them, particular aspects of modern capitalism violate the ability of individuals to trade in the absence of coercion. Mutualists support markets and private property in the product of labor, but only when these markets guarantee that workers will realize for themselves the value of their labor.^[2]

Similarly, in recent times, most economies have also extended property rights to include such things as patents and copyrights. This has been criticized as being coercive against those with few prior resources. Such regulations discourage the sharing of ideas, and encourage nonproductive rent seeking behavior, both of which enact a deadweight loss on the economy, erecting a prohibitive barrier to entry into the market.^[5] Not all pro-capitalists support the concept of copyrights, but those who do argue that compensation to the creator is necessary as an incentive.^[5]

People who advocate property rights view these patents and copyrights are necessary to create incentives and to avoid the tragedy of the commons. Milton Friedman claims property rights is "the most basic of human rights and an essential foundation for other human rights."^[6] Siegan H. Siegan, who is a proponent of property right, claims with property rights protected, people are free to choose the use of their property, earn on it, and transfer it to anyone else, as long as they do it on a voluntary basis and do not resort to force, fraud or theft. It has been claimed that in such conditions most people can achieve much greater personal freedom and development than under a regime of government coercion. Secure system of property rights also reduces uncertainty and encourages investments, creating favorable conditions for the economy to be successful.^[7]

Market failures

Market failure is a term used by economists to describe the condition where the allocation of goods and services by a market is not efficient. Market failure can be considered a scenario in which individuals' pursuit of self-interest leads to bad results for society as a whole.^[8] From this, critics of capitalism prefer economic intervention by government into free markets.^[9] The lack of perfect information and perfect competition in a free market is grounds for government intervention. Certain unique problems with a free market are monopolies, monopsonies, insider trading, and price gouging.^[10]

Legislation has been introduced to deal with these concerns (e.g. anti-trust legislation or financial regulation). Also, governments overseeing capitalist economies have been known to set mandatory price floors or price ceilings at times, thereby interfering with the free market mechanism. This usually occurrs in times of crisis, or relating to goods and services viewed as strategically important. Electricity, for example, is a good that has typically been subject to price ceilings in many countries.^[11] Some economists have analysed market failures, and see governments as having a legitimate role in mitigating these failures through regulation and compensation schemes.

Wages determined by a free market mechanism is also a problem by because some wages are unjustifiably low or unjustifiably high. Another failure is that free markets usually fail to deal with the problem of externalities, where an action by an outside agent positively or negatively affects another agent without any compensation.^[12] The most widely known externality is pollution. More generally, free market allocation of resources in areas such as health care, unemployment, wealth inequality, and education are market failures.^[13]

Poor distribution of goods is also a market failure. The distribution of goods based on profit, rather than need has been criticized.^[14] In 1995, 200 million Indians went hungry, while the Indian economy was exporting $625 million worth of wheat and $1.3 billion worth of rice that same year.^[15]

Market instability

Market instability is a permanent feature of capitalist economy.^[16][17] According to Marx, the unplanned and explosive growth of capitalism does not occur in a smooth manner, but is interrupted by periods of overproduction in which stagnation or decline occur (i.e. recessions).^[14] Several contradictions in the capitalist mode of production are present, particularly the internal contradiction between anarchy in the sphere of capital (i.e. free market) and socialized production in the sphere of labor (i.e. industrialism).^[18] Due to the unplanned nature of the system, capitalists produce without knowing in advance what they can sell, while at the same time unleashing huge productive capabilities through industrial organization. The result is that crises are not caused by shortages, like a crop failure, but rather from a production of too many goods. Marx and Engels, in the Communist Manifesto, highlighted a uniquely capitalist juxtaposition of overabundance and poverty:

"Society suddenly finds itself put back into a state of momentary barbarism. And why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce."^[14]

Profit and exploitation

Except the proponents of capitalism, all generally view capitalist system as inherently exploitative. In an economic sense, exploitation is often related to the expropriation of labor for profit and based on Marx's version of the labor theory of value. The labor theory of value was supported by classical economists like David Ricardo and Adam Smith who stated that "the value of a commodity depends on the relative quantity of labor which is necessary for its production."^[19]

In Capital, Marx identified the commodity as the basic unit of capitalist organization. Marx noted a "common denominator" between commodities, in particular that commodities are the product of labor and are related to each other by an exchange value (i.e. price).^[20] There is a connection between labor and exchange value, in that commodities are exchanged depending on the socially necessary labor time needed to produce them.^[21] However, due to the productive forces of industrial organization, laborers are seen as creating more exchange value during the course of the working day than the cost of their survival (food, shelter, clothing, etc).^[22] Capitalists are thus able to pay for this cost of survival, while expropriating the excess labor (i.e. surplus value).^[21] In other words, workers are seen as producing enough value to cover their wages during part of the working day, while the rest of the working day produces value in excess of what they're paid (and results in profits).

Due to economic inequality, the purchase of labor cannot occur under "free" conditions. Since capitalists control the means of production (e.g. factories, businesses, machinery) and workers control only their labor, the worker is naturally coerced into allowing their labor to be exploited.^[23] Exploitation occurs even if the exploited consents, since the definition of exploitation is independent of consent. In essence, workers must allow their labor to be exploited or face starvation. Since some degree of unemployment is typical in modern economies, Marxists argue that wages are naturally driven down in free market systems. Hence, even if a worker contests their wages, capitalists are able to find someone from the reserve army of labor who is more desperate.^[1]

Unions are the traditional method of giving workers more bargaining power in the marketplace. The act of striking has historically been an organized action to withhold labor from capitalists.^[24] Critics of capitalism, while acknowledging the necessity of trade unionism, stated that trade unions simply reform an already exploitative system, leaving the system of exploitation intact.^[25][26]

Inefficiency and waste

Some opponents criticize capitalism's inefficiency. They documented a shift from pre-industrial reuse and thriftiness before capitalism to a consumer-based economy that pushes "ready-made" materials.^[27] A sanitation industry arose under capitalism that deemed trash valueless; a significant break from the past when much "waste" was used and reused almost indefinitely.^[27] In the process capitalism has created a profit driven system based on selling as many products as possible.^[28] Critics relate the "ready-made" trend to a growing garbage problem in which the average American throws out 4.5 pounds of trash per day (compared to 2.7 pounds in 1960).^[29] Anti-capitalist groups with an emphasis on conservation include eco-socialists and social ecologists.

Planned obsolescence has also been criticized as a wasteful practice under capitalism. By designing products to wear out faster than need be, new consumption is generated.^[27] This would benefit corporations by increasing sales, while at the same time generating excessive waste. A well-known example is the charge that Apple designed its iPod to fail after 18 months.^[30] Planned obsolescence is wasteful and an inefficient use of resources.^[31]

Marketing has been identified as wasteful. American corporations spend upwards of $1 trillion on marketing, and wonder whether this money could be better spent.^[32] Authors such as Naomi Klein have criticized brand-based marketing for putting more emphasis on the company's name-brand than on manufacturing products.^[33]

Unequal distribution of wealth and income

It is reasonable to expect that some disparity in wealth and income among individuals would exist in a capitalist system as this is determined through market forces rather than by centralized governmental authority. A significant disparity and concentration of wealth is a problem and this is endemic to capitalism. Thus capitalism gives rise to inequality in wealth. Capitalists have not been able to provide a solution for this.

Excessive inequality

Even those critics who do not view inequality as problem acknowledges that in capitalism, the distribution of wealth and earnings is too unfair, dysfunctional, or immoral. They cited the fact that, in the US, the shares of earnings and wealth of the households in the top 1 percent of the corresponding distributions are 15 percent and 30 percent, respectively[3].

Critics pointed that an untamed capitalist system have inherent biases favoring those who already possess greater resources. For example, the rich people can give their children a better education and inherited wealth. This creates or even increases large differences in wealth between people who do not differ in ability or effort. They cite the examples that in the U.S., 43.35% of the people in the Forbes magazine "400 richest individuals" list were already rich enough at birth to qualify [4], or a study that indicates that in the US wealth, race, and schooling are important to the inheritance of economic status, but IQ is not a major contributor and the genetic transmission of IQ is even less important [5].

Advocates of capitalism argue that the problem can be resolved by progressive taxation, wealth tax, and inheritance tax. They note that such taxes are already implemented in modern mixed economies. The best extent of such taxes and how much inequality there should be is much discussed and researched, but these variables can be changed without abandoning capitalism. The American Historian David Hackett Fisher, in his 1996 book The Great Wave argues that some characteristics of society commonly blamed on capitalism may in fact be the indirect result of decades-long inflation.

Other arguments on capitalism's unequal wealth distribution include:

• The capitalists gather their wealth by exploiting employees. An employee is not paid according to the true worth of his labor but according to what the employer is willing to pay him. The employer pays him less than what his labor is worth so that the employer can make a profit when he sells the produce. In this way, the employee's labor is being exploited.
• Wealth and unequal distribution can create social problems (such as higher crime rates). These problems affect both poor and rich.
• Government interference in markets can be skewed to benefit the wealthy. In particular, wealthy people have the financial means and incentives to influence or corrupt government officials and to lobby for favorable legislation.
• Many people have little wealth left over after living expenses, so they can't make it grow quickly. This further deepens the disparity between rich and poor.
• Persistent long-term inequality of wealth undermines the motivation of the poor to improve their stance. This creates not only direct but perpetual sociological inequity.
• Wealthy people save relatively more than poor people. Hence some economists believe that an unequal distribution of wealth undermines an economy's mass buying power, effectively leading to lower aggregate sales, reduced wealth production, unemployment and crises. (see Keynes) Economists, however, argue that saving is also necessary in an economy, since it provides the means for investment into new technologies and processes.
• Wealth is defined and judged incorrectly, in many different ways. In particular, people may attach value to things for seemingly irrational reasons (sentimental value). Some may also value spiritual development more than material wealth. Capitalism's focus on absolute monetary value thus undermines the legitimacy of alternate paradigms.
• The wealthy may not put their wealth to productive use. For example, they may buy land just to deny access to it to others, for personal or environmental reasons. Other critics of capitalism, however, would ask whether or not capitalistic production narrowly-defined is a good thing, especially if it is seen as damaging the environment, and such an action of denial may be seen as the lesser of two evils.

Employment/unemployment

Since individuals typically earn their incomes from working for companies whose requirements are constantly changing, it is quite possible that at any given time not all members of a country's potential work force will be able to find an employer that needs their labor. This would be less problematic in an economy in which such individuals had unlimited access to resources such as land in order to provide for themselves, but when the ownership of the bulk of its productive capacity resides in relatively few hands, most individuals will be dependent on employment for their economic well-being. It is typical for capitalist economies to have rates of unemployment that fluctuate between 3% and 10%. Some economists have used the term "natural rate of unemployment" to describe this phenomenon.

Depressed or stagnant economies have been known to reach unemployment rates as high as 30%, while events such as military mobilization (a good example is that of World War II) have resulted in just 1-2% unemployment, a level that is often termed "full employment". Typical unemployment rates in Western economies range between 5% and 10%. Some economists consider that a certain level of unemployment is necessary for the proper functioning of capitalist economies. Equally, some politicians have claimed that the "natural rate of unemployment" highlights the inefficiency of a capitalist economy, since not all its resources -- in this case human labor -- are being allocated efficiently.

Some also blame central banks for unemployment, as some have been known to intervene in the economy to prevent full employment out of fear of driving wages up.^[34].

Some libertarian economists, such as Henry Hazlitt, argue that higher unemployment rates are in part the result of minimum wage laws, as well as in part the result of misguided monetary policy, and are not inevitable in a capitalist economy. In Economics in One Lesson, Hazlitt argues that if the value of the work of some potential employees is lower than the minimum wage, it would penalise the employer to employ them. Accordingly, if the value of the productive capacity of a given employee is worth less to the employer than the minimum wage, that person will become unemployed, and therefore unemployment will exist whenever the legal minimum wage exceeds the true economic value of the least productive members of the labor pool. Likewise, if the amount of money a person can obtain on welfare approaches or equals what they could make by working, that person's incentive to work will be reduced.

Islamic criticism of capitalism

Islamic Law recognizes the right to private property but regulates economic activities with a system of checks and balances. A 2.5% alms tax (Zakat) is levied on all savings and assets beyond those normally used, including bank savings, a second home etc.

Usury or riba is forbidden, and religious law encourages the use of capital to spur economic activity while placing the burden of risk along with the benefit of profit with the owner of the capital.

Many Islamic thinkers have spoken out against capitalism along with totalitarian socialism usually by condemning "materialism." Notably, Sayyid Qutb did so in The Battle Between Islam and Capitalism, published in 1951.^[35]

The Islamic constitution of Iran which was drafted by mostly Islamic clerics (see the Assembly of Experts) dispraises the "materialist schools of thought" that encourage "concentration and accumulation of wealth and maximization of profit."^[36]

Currently, many governments of countries where Islam is the official state religion own a controlling stake in large businesses like the telecommunication, airlines, transportation, and energy industry.

Marxist criticism of capitalism

According to Marxism, private ownership of the means of production enriches capitalists (owners of capital) at the expense of workers ("the rich get richer, and the poor get poorer"). In brief, the owners of capital do not work and therefore steal from or exploit the workers. Gradually, the capitalists will accumulate more and more capital and make the workers continually poorer, in the end causing a revolution. The private ownership of the means of production is therefore seen as a restriction on freedom.

Marx and his followers have pointed that capitalism is a contradiction-laden system characterized by recurring crises having a tendency towards increasing severity. This tendency of the system to unravel combined with a socialization process which links workers in a world-wide market are two major factors that create the objective conditions for revolutionary change. Capitalism is just one stage in the evolution of the economy of a society. Immanuel Wallerstein approaching matters from a world-systems perspective, cites the intransigence of rising real wages, rising costs of material inputs, and steadily rising tax rates, along with the rise of popular antisystemic movements as the most important global secular trends creating unprecedented limiting pressures on the accumulation of capital. According to Wallerstein, "the capitalist world-economy has now entered its terminal crisis, a crisis that may last up to fifty years. The real question before us is what will happen during this crisis, this transition from the present world-system to some other kind of historical system or systems." ^[37]

Supporters of capitalism argue that ownership of productive capacity provides motivation to owners to increase productive capacity and so generally increase the average material wealth ("we all get richer"). Opponents of capitalism countered this by pointing out the unchanged after-tax income of the poorest quintile of the U.S. population during the last two decades. While at the same time the average income and especially the income of the rich have increased. [6]. According to "United for a Fair Economy," in 1982 CEOs of major corporations in the U.S. earned 42 times the annual wages of the average worker; in 2002 the ratio stood at 282:1 [7].

According to Marxism, Capitalism is considered to be a stage of history where there is a class system in which the proletariat is exploited by the bourgeoisie.

Imperialism and human rights violations

Some critics argue that imperialism, poverty, oppression, exploitation and abuse of human rights are the ills caused by capitalism. They point systematic violence against political opponents, participation in coups which have placed dictators in power (for example Pinochet in Chile, Argentina with its dirty war); and large scale democide (like in the Congo Free State). Some argue that capitalism thrives on an uneven and exploitative relationship between wealthy nations (see dependency theory) who force regime or system changes in poor countries which are only beneficial to them, often through exploitative wars (like the Opium wars or the Second Sino-Japanese War). Although some of these violations occurred during a time period and in states sometimes considered being more capitalist than today since the government share of the economy was much smaller, U.S and European support of multinational-friendly capitalist dictatorships in Latin America and Africa lasted until the mid 1980s.

Near the start of the 20th century, Vladimir Lenin claimed that state use of military power to defend capitalist interests abroad was an inevitable corollary of monopoly capitalism.^[38] Proponents of capitalism claim that these problems have been widespread through all of human history, including in many states characterized as socialist such as in the Soviet Union under Stalin. Some claim that these practices are not consistent with the principles of capitalism even though they have existed in nations or in the colonies of nations (commonly or loosely) labeled as capitalist. They deny that many of the colonies had capitalist economic systems and claim that their economies mostly continued to be feudalistic. Supporters emphasize that it was capitalist states that abolished slavery throughout the world and that it was capitalist states who developed the modern democratic system. Critics reply that the major imperialist powers accumulated huge amounts of capital through slavery before it was abolished. Furthermore, they argue, slavery was only abolished after it became less expensive to pay wages in industries like mining and agriculture in the colonies.

Marxists, particularly Lenin, argue that capitalism needs imperialism in order to survive. The unplanned nature of capitalism, they say, inevitably overproduces commodities and overuses resources, which leads it to expand its markets into and drain the resources out of other, less-developed nations. The wealthy nations, they say, must maintain cheap access to third world natural resources and unfree labor, by force if necessary. They argue that the capitalist countries like England initially were helped by the primitive accumulation of capital through the "theft" of natural resources and exploitation of slave labor from large parts of Asia, Africa and the Americas which spurred the industrial revolution. They see what they characterize as unjust exploitation, militarily (such as India in 19th century) or economically (e.g. through IMF structural adjustment programs during the 1980s), as part of the nature of capitalism. The constant, capitalist drive to expand markets is viewed by many as the primary cause of globalization.

In his essay, Imperialism: The Highest Stage of Capitalism, Vladimir Lenin advanced the now widespread thesis that the ‘New Imperialism’ of the late 19th and early 20th centuries was an inevitable correlary of monopoly capitalism. According to Lenin, the export of financial capital superseded the export of commodities; banking and industrial capital merged to form large financial cartels and trusts in which production distribution are highly centralized; and monopoly capitalists influenced state policy to carve up the world into spheres of interest (Burnham). These trends led states to defend their capitalist interests abroad through military power.

Most capitalists acknowledge that military exploitation should be condemned, but argue that economic globalization and the introduction of capitalist principles to the developing world is improving the living standards worldwide. See the empirical research on Indices of Economic Freedom and the book the The Improving State of the World and research stating that the percentage of people living on less than 1 doller per day halved between 1981 and 2001.[8] This is disputed by critics who claim that the very opposite is the case, that an underdeveloped, distorted economic growth concentrating wealth in the hands of elites within the cities while maintaining semi-feudal property relations in the contry side--increasing overall disparity--are products of global capitalism.[9]

Democracy

According to Marxism, the structure of capitalism necessarily leads to exploitation of workers, regardless of whether or not the political system is one of a bourgeois democracy. For this reason, the capitalist economic system of Western countries is emphasized rather than the democratic political system. A capitalist system is an economic system - although often associated with democratic political systems, they are independent from each other. Capitalist systems have often functioned under unelected governments: the classic case is the United Kingdom, where less than 20% of adult males could vote prior to 1885, and women did not receive the vote until 1918.[10] Some recent examples include Hong Kong, Singapore, and Chile under the rule of General Pinochet. Governments espousing fascist (or "national socialist") rhetoric do not make substantive changes to the capitalist economies when they assume power.

However, many communists reject the Communist states for their lack of democracy, despite their central planning and common ownership of the means of production. Similarly, many pro-capitalists reject states having some characteristics of capitalism but lacking democracy.

An important Marxist criticism of capitalism is that it is only democratic to the capitalist class, citing examples such as people not being able to criticize one's boss out of risk of getting fired and not being able to express their opinions due to lack of funds to afford access to the media. Pro-capitalists claim that in a free market one can change work or start one's own enterprise. If one has an interesting opinion and there is freedom of speech, there will be a profitable market for this. Critics object that in capitalism, most people are too concerned about their own economic welfare that they have no time for this; and that a profitable market in media tends to distort the media to broadcast profitable media rather than truth. Pro-capitalists argue that there is little evidence that speech would be more easily spread in a non-capitalist system, especially political speech, since it would all have to be filtered through the state. But non-capitalism does not imply state-controlled speech.

Latin American intellectuals like Eduardo Galeano stated that capitalist practices do more to damage democracy in peripheral countries than encourage it. He points to democratically elected leaders like João Goulart, Salvador Allende, and Juan Peron who were forced out of office by U.S. and European capitalist interests and replaced with military dictators during the 1960s and 1970s.

Economic freedom

Capitalism undermines economic freedoms due to an unfair and inefficient distribution of wealth and power; a tendency toward market monopoly or oligopoly (and government by oligarchy); imperialism, various forms of economic exploitation; and phenomena such as social alienation, inequality, unemployment, and economic instability. Critics have maintained that there is an inherent tendency towards oligolopolistic structures when laissez-faire is combined with capitalist private property. Because of this tendency either laissez-faire, or private property, or both, have drawn fire from critics who believe an essential aspect of economic freedom is the extension of the freedom to have meaningful decision-making control over productive resources to everyone. Economist Branko Horvat explains, "it is now well known that capitalist development leads to the concentration of capital, employment and power. It is somewhat less known that it leads to the almost complete destruction of economic freedom."^[39].

Sustainability

An important modern criticism to the sustainability of capitalism is related to the commodity chains, or production/consumption chains [11],[12]. These terms refer to the network of transfers of materials and commodities which is currently part of the functioning of the global capitalist system. Examples include high tech commodities produced in countries with low average wages by multinational firms, and then being sold in distant high income countries; materials and resources being extracted in some countries, turned into finished products in some others and sold as commodities in further ones; countries exchanging with each other the same kind of commodities for the sake of consumer's choice (e.g. Europe both exporting and importing cars to and from the U.S.). Such processes, all of which produce pollution and waste of resources, are an integral part of the functioning of capitalism (i.e. its metabolism [13]). Such chains, being resistant to change, may be partly responsible for persisting inequalities between different areas of the world. Nonetheless it is possible, although by no means certain, that someday wages reach more or less similar levels worldwide, thus eliminating a major cause which presently makes the environmental costs of commodity exchanges very different from their economic costs, and by consequence producing a more rational structure of production/consumption chains. Also, minimal restrictions on free trade (see Tobin Tax) have been proposed to induce a restructuring of the capitalist network, but such measures are typically rejected by proponents of self regulation of capitalism through free trade.

Many environmentalists have long argued that the real dangers are due to the world's current social institutions that they claim promote environmentally irresponsible consumption and production. Under what they call the "grow or die" imperative of capitalism, they say, there is little reason to expect hazardous consumption and production practices to change in a timely manner. They also claim that markets and states invariably drag their feet on substantive environmental reform, and are notoriously slow to adopt viable sustainable technologies. [14][15]. Immanuel Wallerstein, referring to the externalization of costs as the "dirty secret" of capitalism, claims that there are built-in limits to ecological reform, the costs of doing business in the world capitalist economy are ratcheting upward because of deruralization and democratization, he therefore sees no exit from our dilemmas within the framework of the capitalist world-system.[16]

Some critics claim that strong economic growth also requires increasingly greater amounts of natural resources and energy and they question whether this can continue in the future. Those arguing for continued growth note that numerous past predictions of shortages have failed since new technology has continuously allowed exploitation of previously unavailable resources. That this continues in the future is considered to be of critical importance, especially for world energy markets, which face a peak and subsequent decline in fossil fuel production. Since 1970, each 1% increase in world GDP has yielded a 0.64% increase in energy consumption. See Future energy development. On the other hand, it is accepted by the oil industry that world oil production will peak or has already. See peak oil

Religious criticism

Some religions criticize or outright reject capitalism. For example, Islam strongly forbids usury (lending money at an interest). Christianity has been the source of many other criticisms of capitalism, particularly its materialist aspects. The first socialists drew many of their principles from Christian values (see Christian socialism), against the "bourgeois values" of profiteering, greed, selfishness and hoarding. Whilst anti-capitalist sentiments vary, generally, Protestant Christians and most western Roman Catholics do not oppose capitalism. Some that do, also support a mixed economy in order to ensure "decent" labour standards and relations, as well as economic justice. However, Soviet Russia and the misidentification of it as "godless communism" convinced some Christians, especially in the United States, to hold strict forms of socialism with high suspicion, particularly in the early 20th century. Later, that changed to embracing soft forms of socialism and State welfare, as well as Christian religions embracing soft forms of capitalism.

Noam Chomsky's criticism

Noam Chomsky stated that the asymmetric application of free market principles creates a "privatized tyranny": "The talk about labor mobility doesn't mean the right of people to move anywhere they want, as has been required by free market theory ever since Adam Smith, but rather the right to fire employees at will. And, under the current investor-based version of globalization, capital and corporations must be free to move, but not people, because their rights are secondary, incidental." Further, he emphasizes that it can matter what entities have rights in the market—"Do they inhere in persons of flesh and blood, or only in small sectors of wealth and privilege? Or even in abstract constructions like corporations, or capital, or states?"—and remarks that of what he sees as the three tyrannical systems of the 20th century, Bolshevism, and fascism have "collapsed", but "private corporatism… is alive and flourishing… [a] system of state corporate mercantilism disguised with various mantras like globalization and free trade."^[40]

According to Chomsky, the wealthy use free-market rhetoric to justify imposing greater economic risk upon the lower classes, while being insulated from the rigours of the market by the political and economic advantages that such wealth affords.^[41] He remarked, "the free market is socialism for the rich—[free] markets for the poor and state protection for the rich."^[42]

Notes

External links

• A Reconsideration of the Theory of Entrepreneurship: a participatory approach - Critique of capitalism
• How The Miners Were Robbed 1907 anti-capitalist pamphlet.
• Information and Economics: A Critique of Hayek by Allin F. Cottrell and W. Paul Cockshott
• Ringmar, Erik. Surviving Capitalism: How We Learned to Live with the Market and Remained Almost Human (London: Anthem Press, 2005)
• Social economy: A Market Economy without Capitalism
• Value, Price and Profit - Karl Marx on the basic features of capitalism.
• Why Do Intellectuals Oppose Capitalism? by Robert Nozick