by Umair Haque
January 27, 2019

from Eudaimonia Website







Why Capitalism Led to Collapse,

Not Prosperity and Maturity



We're beginning to have a long overdue debate these days:

  • What's the point of billionaires, anyway?


  • Do societies need billionaires, or do billionaires need societies?


  • Which one is more true?

Whether we couch it in terms of higher tax rates or new kinds of taxes, like wealth taxes, or breaking up monopolies, or even widespread social collapse and degeneration - the underlying question remains.

There are essentially three positions that a thinking person  -  at this juncture in human history  -  should take when it comes to billionaires.

  • One, a society shouldn't have billionaires, period.

  • Two, a society shouldn't have billionaires while a single child or adult still lives in poverty.

  • Three, a society shouldn't have billionaires until everyone (and that means everyone) has something like a decent middle class life.

Now, my three positions will either strike you as making eminent sense  -  or they'll rankle, maybe even make you angry.


So let's think about them for a moment.

What does a glimpse at the world today  -  and yesterday  -  tell us? We are  -  or at least I am  -  trying to learn, not just restate dead ideologies.

Let's start here...


How do we justify billionaires  -  particularly in America? After all, billionaires are a "social construction" (as the kids say), too. Nobody's inherently a billionaire. We decide as a society to reward some activities and punish others and treat others with indifference  -  hence, billionaires.


The justification for billionaires  -  which is a product of American thinking, that then spread around the globe  -  goes something like this.

Without billionaires, we won't have progress, wealth, riches, security, or fortune. In short, billionaires equal prosperity.

It's trickle-down economics, in a slightly cleverer disguise.

Now let's look at reality. Do you see any of these grandiose, amazing, mythical benefits of billionaires having, well, actually materialized in America? I don't...


It's self-evident to see that the rise of billionaires didn't result in prosperity, wealth, riches, fortune.


The average American is broke. He lives paycheck to paycheck. He's crushed by debt he can never repay. He lives a life of psycho-economic trauma, something like a neo-peasant, constantly worrying if his overlord will dispossess him just because the harvest  -  which is beyond his power to control  -  failed.


It's a terrible plight. Billionaires didn't make any of that go away  -  in fact, they seemed to make it happen.


How do we know...?

What is the relationship of billionaires and progress in society, more generally? Take a look at Europe. Europeans societies have (far) fewer billionaires. But they have much, much greater progress. Along every single dimension you can imagine, and then some.


They have functioning healthcare, retirement, education, media, and so forth  -  and people have higher incomes and savings, too. Billionaires don't equal progress. In fact, the precise opposite is true  -  preventing millionaires from becoming billionaires results in progress.


That is why Europe is at a higher level of development than America today :

 it is a social democracy, whereas America is still an industrial capitalist economy, just a decayed, decrepit one now.

Billionaires don't equal progress. They equal a lack of progress...





And less billionaires equals progress  -  at least if we're talking about the same general kinds of societies, which is relatively rich democracies.

  • Do you see how different this is from the capitalist myth?

  • So why don't billionaires equal progress?

If we're thinking people, we should want to understand this question intimately  -  because it's a much more interesting one than American thinking, in particular, allows us to really wonder about.


After all, it cuts to the heart of our stories of prosperity, the myths we tell ourselves about how good lives come to be.

The American version  -  or the capitalist version  -  of the myth of prosperity goes like this.

I will only do something to benefit you if you pay me to do it. If you don't pay me, I will only harm you and hurt you  -  that is my nature.


Therefore, the more I am paid, the more whatever I have done must have benefited everyone  -  and unless I am paid a great deal, I cannot have benefited many, either.

In other words, the American story of prosperity says that we are selfish, greedy, materialistic things  -  who, unless we are paid colossal fortunes, won't lift a finger to ever better, help, or improve anyone at all.


But is any of that true?

Let's look at history for a moment...


When we do, a great  -  and surprising truth  -  emerges. The people who have created the things that have benefited us all most have never done it for money.


Not once, ever, so far as I can tell...

  • Jonas Salk gave away the polio vaccine. Do you know what he had to say about that?

"Can you patent the sun...?"

The inventors of insulin, too, intended their discovery to be made free.

  • Sir Tim Berners Lee didn't patent the WWW and make a killing  -  he made it public.


  • Einstein and Newton didn't charge anyone billions for discovering gravity and relativity  -  which went on to be the linchpins of two industrial revolutions.

Are you seeing a trend here?


Let's do a more concrete example that connects all these dots now...

Imagine you were Edward Jenner, who discovered the vaccine. Maybe if you believed in the American myth of 'prosperity', you'd charge everyone  -  wait, how much would you charge everyone?


Well, the vaccine would save their life  -  so you'd charge them however much they had  -  you'd maximize your price, to maximize your profit. Bang! Everything...


Let's say they handed over their houses and savings to you. Now you own them. They get your vaccine. What are you to do with those houses, all that money? Well, you have to lease it back to those very people  -  maybe you call all that a "loan."


Now they're effectively working for you  -  forever...

But who's better off here? Nobody, really. The optimal scenario in fact is one in which you give the vaccine away. Maybe you charge enough to buy yourself a decent house and a car or two and put some money in the bank.


But why would you want to own everything?


Doing that only minimizes the sum total of freedom, happiness, and possibility in society  -  whereas you giving the vaccine away, or at least charging the minimum, not the maximum for it, maximizes the freedom, happiness, and possibility in society.

Now. Which scenario is the one that happened in American society? It's the one in which owners maximize prices, in order to maximize profits, isn't it?


But that goes on to minimize a society's freedom, happiness, and possibility (or any other aspect of prosperity you'd care to think about.)


It's when owners minimize prices, in order to break even, that society's freedom, happiness, and possibility is maximized.



The America story of prosperity is badly wrong...


I say "the American story", but I'm being unfair  -  it should better be called,

"the capitalist story" or "the neoliberal story."

My friend Jake put all his savings into a little microbrewery.


He's not there to maximize prices and profits, like some kind of corporate bean-counter.


He's there, in fact :

though he doesn't quite know it  -  to minimize them, to the point that he can, without, say, treating his employees like Amazon drones.


His goal is share his love of beer with everyone that he can  -  and make a decent living along the way.

Do you see the difference?

Let me tie up some of the threads.


The greatest discoveries and inventions in history have never come from the greedy, selfish, and predatory  -  that's a myth capitalism wants you to believe, but it's badly wrong. They have all  -  every single one  -  come from imaginative, curious, determined minds, who found things so mysterious and awesome, they could only give them away, in the end, share them.


And I mean literally  -  Jake charges a few dollars a beer, but Salk charged you nothing for a polio vaccine.


Which one benefits you more?

It's true that we might have fewer iPhones and gadgets and Harvey Weinstein movies if we had less billionaires. But is that really a huge loss? The flip side is also true; we'd probably have a lot more Salks, Einsteins, Newtons, and Jenners.


But they discover the things that benefit us the most  -  so we are far better off with fewer billionaires even if we have less iPhones, because we will have more vaccines, antibiotics, and theories of relativity (not to mention 1984s, art, literature, creativity.)

So billionaires, by hoarding all the things that no one really "owns" like,

  • possibility

  • freedom

  • happiness,

...destabilize a society.


When people grow short of those things, they grow angry, enraged, depressed, furious, as progress grinds to a halt, as they're charged their life savings and homes for just that next tiny morsel of progress.


They turn to tyrants and demagogues. They end up collapsing into authoritarianism and fascism.


That is one the great lessons of modern history.

Because the greatest discoveries and creations in human history have never come from the greedy and selfish, but from the magnanimous and wise and child-like, so, too, billionaires don't really benefit a society  -  they free-ride on precisely on the gifts of the truly wise and noble.


Now that we really understand how prosperity happens  -  through a series of wonderful gifts, that no civilized person can really hoard, as improbable as it sounds  -  what are billionaires really doing?


Well, they are essentially finding ways to "privatize" portions of those wonderful gifts, which are really all of our birthright. So there are the internet billionaires  -  finding ways to carve out chunks of Sir Tim's gift, which he gave to us all, but they want to keep only for themselves.


There are pharma companies charging fortunes for medicines like insulin, or vaccines  -  all of which never could have come to be if capitalism was the driving force in the first place.

Billionaires are just finding ways to hoard progress  -  to "own" freedom, happiness, and possibility.


But can anyone really "own" these things? Should they?


In that sense, billionaires aren't creating prosperity. In fact, they are sitting atop a series of public goods ,

 vaccines, antibiotics, the WWW, roads, hospitals, electricity, the alphabet ,

...and simply finding ways to privatize their benefits, and, often socialize the losses accrued along the way.


When an internet billionaire carves off a chunk of the WWW  -  that's privatizing a public good. When a pharma company charges a huge fortune for some new drug  -  that's privatizing many public goods, which the discovery of that drug rested upon.


Billionaires aren't the 'creators of prosperity.'


They're it's monopolists, its predators, the sharks cruising the waters of civilization...



Why do I say that? Is that unfair?


Well, think of what really happens when today's billionaires monopolize yesterday's public goods.


When there's a billionaire charging you an arm and a leg for everything  -  which should have been public in the first place  -  from medicine to healthcare to education to media, what happens? The next generation's Einsteins, Salks, and Berners-Lees are a lit less likely, aren't they?

Remember my Edward Jenner example  -  you own everything, and everyone now basically spends their life in debt to you?


Now all those bright young kids who might have been tomorrow's great geniuses are slaving away at some crap dead-end McJob  -  or worse, McGig  -  instead of having the time, energy, money, to work on their breakthroughs.


Maybe those very kids get so frustrated and angry they turn to Trumps and Brexits. Maybe they end up stupid, ignorant fascists  -  instead of wise, gentle giants of the mind, heart, or soul. Bang! Implosion...


Remember when I said that happiness, freedom, and possibility are all minimized by too many billionaires, charging people too much, for things that they didn't create in the first place  -  trying to own freedom, happiness, and possibility???


That's an example of exactly what it means...

Salk, Jenner, Einstein, Berners-Lee. All these people were brave and wise in a way we don't recognize enough yet. They understood that a great discovery or creation or breakthrough is not something that any one person can really "own."





In contradiction to the most basic beliefs of capitalism, when one person "owns" a thing that benefits all, nobody is really better off. That one person becomes something like a king  -  but everyone else becomes something like a peasant.


And then there's a feedback effect.

  • Peasants don't turn into great geniuses at the same rate as genuinely free people.

  • Society  -  including the king  -  is starved of progress, of possibility, of freedom, of happiness.

  • Even the king's cancer might have been cured  -  but now the peasant who would have discovered that cure is there tilling the mud, to earn his bread.

In the end, maybe that very peasant becomes a fascist, in his desperation.

The story of prosperity is stranger  -  and above all, more human  -  than we think it is. We can and should devote ourselves to noble and great and mighty causes  -  or even just little ones, when they are genuinely interesting and true and wise.


But we do so not out of our own narrow self-interest. But out of the desire to share, to endow, to give... The impulse, urge, and need, to create, discover, to transform.


We are all carpenters, seeking the mysterious, awesome, impossible truth of the wood. When we find it, if we are lucky enough to chance upon it, what greater happiness is there in life than sharing that mystery, that beauty, that moment?


That way lies freedom, possibility, meaning, and purpose my friends.

But if we find the truth of the wood  -  and all we ever do, greedily, selfishly, jealously, is charge people a fortune just to glimpse it ,

  • What good has it done for them, for us, or for anything, including truth and the wood, in the end?


  • Hasn't it cheated us all of the very meaning of the moment in the first place?

Ah, now you see...


Prosperity is a strange, improbable series of gifts. They are really just better just called civilization. The act of hoarding them, of profiteering on them, of aspiring to "own" them, is gross and immoral and uncivilized in the first place.


It is a form of self-destruction, of predation, of folly.


That is why billionaires need societies more than societies need billionaires...