I was recently watching “Libertarian Socialist Rants” on YouTube and I watched his video on capitalism. In this piece I will refute part’s of that video and the article from Libcom.com it is based off. I will not refute everything I have a problem with but some of the biggest points I see.

Those accumulating capital do so better when they can shift costs onto others. If companies can cut costs by not protecting the environment, or by paying sweatshop wages, they will. So catastrophic climate change and widespread poverty are signs of the normal functioning of the system.

To make my life life easier see the paragraphs on how economic freedom helps individuals and the environment in my previous post here. I clearly demonstrate a positive relationship between economic freedom and wages and show that economic freedom leads to a better environment.

The difference between the wages we are paid and the value we create is how capital is accumulated, or profit is made.
This difference between the wages we are paid and the value we create is called “surplus value”. The extraction of surplus value by employers is the reason we view capitalism as a system based on exploitation – the exploitation of the working class.

The good old labor value theory. Even tho it has been debunked for over 100 years it still comes back.

Let’s do a quick thought experiment (borrowed from WAC on Facebook)

A. If I put 100 hours into making 1000 terribly-flavored candies, does that mean people would value the product merely because I had wasted 100 hours of my time? Or is it more likely that they’d dislike the terrible flavor and thus not value the fruits of my labor?

B. Suppose I spent 50 hours digging a hole and another 50 hours filling it back up? Would people value the flat land – the SAME flat land that existed before – more than they originally did, merely because I had put 100 hours of labor into achieving no result?

One can easily reason, then, that this labor theory of value, as postulated by Marx, is fatally flawed. As author John Ahrens concludes, in Bowling Green State University’s publication regarding exploitation, “the labor theory of value has been substantially discredited.”

If you want to see more criticism’s see this Wikipedia page and here is another post taking it on. In case anyone wants to know value is subjective.

The capitalist economy also relies on the unpaid work of mostly women workers.

The Honors Thesis of Florida State University student Signè Thomas finds that “eleven out of thirteen measures for women’s socioeconomic status show that an increase in economic freedom is associated with an increase in women’s socioeconomic status… and my results are robust across multiple measures of women’s socioeconomic status”

Of course, if businesses were given a completely free hand to do as they please, monopolies would soon develop and stifle competition which would lead to the system grinding to a halt. The state intervenes, therefore to act on behalf of the long-term interests of capital as a whole.

In a free market monopolies rarely happen and if they do companies must maintain high quality low cost goods or they will loose the monopoly.

The “ideal” type of state under capitalism at the present time is liberal democratic, however in order to continue capital accumulation at times different political systems are used by capital to do this. State capitalism in the USSR, and fascism in Italy and Germany are two such models, which were necessary for the authorities at the time in order to co-opt and crush powerful working-class movements.

The USSR was state socialism and fascism is not capitalism.

Capitalism is presented as a ‘natural’ system, formed a bit like mountains or land masses by forces beyond human control, that it is an economic system ultimately resulting from human nature. However it was not established by ‘natural forces’ but by intense and massive violence across the globe. First in the ‘advanced’ countries, enclosures drove self-sufficient peasants from communal land into the cities to work in factories. Any resistance was crushed. People who resisted the imposition of wage labour were subjected to vagabond laws and imprisonment, torture, deportation or execution. In England under the reign of Henry VIII alone 72,000 people were executed for vagabondage.

Capitalism works because of mechanisms (such and the price system) which form spontaneously. Capitalism is a spontaneous system that comes by voluntary transaction.

Later capitalism was spread by invasion and conquest by Western imperialist powers around the globe. Whole civilisations were brutally destroyed with communities driven from their land into waged work. The only countries that avoided conquest were those – like Japan – which adopted capitalism on their own in order to compete with the other imperial powers. Everywhere capitalism developed, peasants and early workers resisted, but were eventually overcome by mass terror and violence.

Economists Francesco Giavazzi and Guido Tabellini found a ” positive feedback effects between economic and political reforms. The timing of events indicates that causality is more likely to run from political to economic liberalizations, rather than viceversa, but we cannot rule out feedback effects in both directions” and that “very few autocracies have pursued economic liberalizations…most economic liberalizations tend to be preceded by [democratic] political reforms, perhaps imposed by a struggling population on an unwilling leader”. IMF research found that “Democracy has a positive and significant impact on the adoption of economic reforms [such as trade liberalization, privatization, and the overall reduction of state control over the economy] but there is no evidence that economic reforms foster democracy.” Lastly Pew Research found that “More than half in 21 of the 25 countries surveyed agree that most people are better off in a free market system even if there is some inequality… A global median of 66% say most people are better off under capitalism, even if some people are rich and some are poor.”

Art Carden and Robert A. Lawson find that “the data suggest[s] that human rights abuses reduce rather than accelerate the pace of economic liberalization.” Indra de Soysa and Krishna Chaitanya Vadlammanati say that “our results show a strong positive association between reforms towards more free markets with regard to governments’ respect for human rights, controlling for a host of relevant factors, including the possibility of endogeneity.

Capitalism has only existed as the dominant economic system on the planet for a little over 200 years. Compared to the half a million years of human existence it is a momentary blip, and therefore it would be naive to assume that it will last for ever.
It is entirely reliant on us, the working class, and our labour which it must exploit, and so it will only survive as long as we let it.

Yes and in that 200 years humanity has seen prosperity like no other and advanced more than it ever has and again with the Labor Value Theory.

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Posted by Roman Bilan

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