Beyond Capitalism

In previous posts, I’ve discussed a definition of capitalism, the central flaw in capitalism, a description of certain identifiable pathologies that can be expected to occur in the final stages of capitalism, and a brief, speculative discussion of what some form of steady-state capitalism might look like: which is, ultimately, just a return to a variant of the static class system of the Medieval European feudalism from which capitalism originated.

The problem with all variants of capitalism revolves around its core concept of the sovereignty of ownership, which is at root a doctrine of separation.

When I “own” something in capitalist economic thought, it automatically and by definition becomes “not yours.” My ownership separates you from whatever I own, unless I explicitly grant you (limited) permission to use it, usually in exchange for some kind of compensation like a rent, or a use-fee, which I am allowed to set and entitled to collect. Conversely, if you buy it from me and it becomes “yours,” it automatically and by definition becomes “not mine.” There are a few concepts of “joint ownership,” but these are always framed in terms of some fictitious third entity — a corporation, a marriage, a contract — which itself holds the sovereign ownership (“not anyone else’s”) and then spells out certain fixed rights and responsibilities for the parties in the agreement. In the event of a “breach” of the contract terms, the fictitious entity is dissolved, and ownership returns to the individual parties.

Our entire legal and economic structure is built around the idea that the natural state of a thing is to be owned by someone.

There is nothing natural about this concept, even within human societies, particularly in the extreme form it takes in capitalist economies and law.

In nature, things are shared: habitats, food, water, air, sunlight. The so-called “circle of life” is nothing more nor less than an enormous, braided loop of dependencies in which everything is ultimately shared.

As they say of beer, you can’t own it, you can only borrow it for a short while.

It is interesting to watch the scientific community come around in its vision of Nature. The nineteenth-century vision of natural evolution was popularized as “nature red in tooth and claw,” a place where everything scrabbles in mortal combat for a brief ray of sunshine or a drop of water, with “pinnacle species” (homo sapiens chief among them all) free to control the world while lounging about in the sun, while “lesser species” are forced to skulk in the shadows beneath rocks, hoping to catch a few crumbs.

As it turns out, this is a reasonably accurate portrayal of nineteenth-century British society under its capitalist economic system, but it is completely wrong regarding Nature. Biologists increasingly find that every species fills an ecological niche that it created and maintains for its own survival and comfort, in an extraordinarily complex web of non-linear relationships that share and reuse everything, right down to genetic components. Eradicate any species, and the whole suffers in unpredictable ways — at least, for a while, until the various feedback loops either replace the eradicated species, or rebalance the entire system.

All of these feedback loops in nature are regulated by a concept of “enough.” A panther comes to the water to drink, and when it has drunk, it walks away. It does not try to prevent other creatures from coming to the water. It does not try to “own” the drinking hole, or the river that feeds it, or the skies that provide rain to fill the river. It does not try to eat every deer in the forest. Once it has enough, it moves on, allowing other creatures to live and thrive. Even other panthers.

Nature is a single, homeodynamic organism, of which we are a part. In nature, the idea of “ownership,” insofar as it exists at all, is both temporary and fluid. For any part of it to try claim sovereign ownership is like the human heart trying to claim sovereign ownership of the blood that it pumps, or the stomach trying to claim sovereign ownership of the nutrition that passes through it.

A few years ago I fell into a debate with a hard-core Free Market Libertarian in a face-to-face meeting, and I posed a straightforward (and common) scenario that completely stumped him.

A man has a farm upslope of another man’s farm. The upslope farmer’s land is covered with trees that he decides to harvest for lumber, by clear-cutting. The loss of the trees will result in mudslides and erosion which will utterly destroy the downslope farmer’s land, including his house and his livelihood. How does the “free market” resolve this?

It had been a long day, and we were both tired, so I will cut him a little slack over his answer, which — to his credit — he recognized was an extremely poor answer. He said that the downslope farmer should offer to buy the land from the upslope farmer for a fair price. I asked what a fair price might be, and he said something about the value of the timber on the land.

Which led me to my next scenario, which I unfortunately didn’t get to discuss with him.

Say that I have bought up properties in a large city, all meth-houses that have been rendered unlivable by the toxic chemicals used in the manufacturing of the drugs: consequently, I purchased these properties for a very low price, and they really aren’t fit for habitation. It is my intent — which I publish extensively in each neighborhood I have bought into — to put a small, dirty nuclear reactor in each of these houses to generate power to sell back to the power company for profit. If the neighborhood residents don’t like this idea, they can buy back these properties from me for a “fair price,” based on the value of selling power back to the power company. Better still, they can lease the properties from me for a lower, but ongoing, rent, to compensate me for the “opportunity cost” of not developing my plan.

If you think this through, it’s a form of extortion. The nominal value of these properties — the “opportunity cost” of not exploiting them — is a purely speculative one (which is true of all “opportunity costs”) based on a bizarre and unworkable business plan that exists only on paper. The actual value of these properties is the value of the properties I don’t own, that I’m threatening to ruin. I don’t have to buy a single pellet of enriched uranium, nor hire a single engineer, nor generate a single Watt of nuclear power to make a fortune off this scheme.

The reason no one has yet tried this is, of course, all that pesky “government regulation” that would stop this in its tracks and possibly jail me for attempted extortion.

It’s exactly the same with the upslope farmer. What net profit will he make from clear-cutting his land? Any number is speculative. The actual value he is exploiting is the value of the farm he doesn’t own, but is threatening to ruin. The matter is obfuscated by the fact that the timber really could be sold, perhaps for a tidy profit, particularly if the upslope farmer doesn’t have any other use for the land. In rural settings like this, there is often no pesky government authority for the downslope farmer to appeal to.

A saner concept of ownership would be a conditional ownership, which is actually quite normal outside capitalist (and Medieval European) economies. It works like this: so long as my ownership does not interfere with anyone else’s activities, I can consider it a sovereign ownership, and I can do what I will with it. As what I do begins to impact others, they start to gain ownership interest. If my use becomes flagrant abuse, as in the clear-cutting or the meth-house examples, I stand to lose all my ownership rights, without compensation of any kind.

It’s a principle we are all familiar with: “Johnny, if you’re going to use your toy fire-truck to hit Billy over the head, I’m going to take it away from you.”

The Netherlands is an interesting case-in-point. They have something they call “the politics of dry feet.” Much of the arable coastal land is below sea level. Individual plots of land are owned by individual farmers, but each farmer has a responsibility to maintain pumping stations to keep seawater out of the fields. No one farmer’s pump can do the job: it takes all of them, working together. If any one farmer skimps on this, it has the potential to ruin everyone’s farms. So, of necessity, they have to maintain a balance of both sovereign ownership and communal responsibility. You can’t just decide to sell your land to a condominium developer: the other farmers have a say in this. If you suffer a bad year and can’t pay for pump maintenance, others have to step in and help maintain your pump.

The natural (and obvious) regulator of such a system is the community itself. The community is also a fluid, flexible concept: it’s better to think of it as an ecology, a web of relationships among stakeholders. In the case of the upslope farmer, the community is everyone downslope who will be affected by his clearcutting. In the case of the meth-houses, the community is each neighborhood within contamination range of my dirty reactors.

The community also includes people downslope in time: future generations, who are not yet born and cannot speak for themselves.

The community also includes the speculative investor who started the trouble, of course, but here’s the interesting thing: the larger the community becomes, the less standing the speculative investor has. This is the heart of conditional ownership. So long as the speculator can contain the area of effect, he’s free to do anything he pleases. As he affects more people, his claim to sovereign ownership gradually erodes to nothing.

This is, of course, very difficult to accomplish with a cut-and-dried, one-size-fits-all system of law under a hierarchy of judges who have no normal contact with the communities involved. I think it illustrates pretty clearly one of the fundamental problems with our concept and practice of law.

I raise these points to suggest just how much is tied up in our current system of capitalism.

Capitalism is unsustainable: we cannot generate exponentially increasing wealth on a finite planet, nor even within the confines of three-dimensional space. My own sense is that capitalism is reaching a global crisis and an ending, probably within my lifetime; though I have a terrible sense of timing on these things, and usually think the wolf is at the door when, in fact, he is still three houses down the street.

That said, I think our overall cultural unconcern, even contempt, for future generations is a pretty clear sign that the system is approaching its death-rattle.

When it fails, whether within my lifetime or later, we will find ourselves facing deep crises in law and politics as well as economics. How we choose to initially resolve those parallel crises will doubtless focus foremost on preserving sovereign ownership — the wealthy must continue to hold wealth — which all but guarantees that the failure will be complete, since we are putting all our efforts into preserving the very core of the problem.

It is perhaps not such a bad thing: it clears the ground for — as Monty Python’s Flying Circus used to put it — something completely different.

One comment on “Beyond Capitalism

  1. […] In a subsequent post, I’d like to explore some alternatives to capitalism by playing with the concept of ownership. […]


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