Wasted, ravaged, destroyed: a plea for an end to this disastrous economic model.

17 January 2011

Capitalism is the greatest waste machine invented by mankind: the natural resources of our planet have been plundered, and the social costs are enormous. 

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In English at least, “waste” as a noun means rubbish, whatever can’t or won’t be used and is only good for the waste bin. The verb “to waste” has more subtle varieties: one meaning is to be profligate, to squander or make inefficient and uneconomical use of a resource. But to “lay waste” is to devastate, for example when an army or a barbarian horde lays waste a city. In gangland slang, to waste can also mean to kill: “I pulled out my gun and wasted him”. The theme chosen for this issue of {MAGAZINE} is admirably illustrated by the capitalist system, which does all three.

Capitalism wastes people by organising them hierarchically and preventing the vast majority of workers from having any say in running the enterprise. It sees employees as nothing but a cost factor. The proof? As soon as a mass lay-off is announced the corporation’s stock goes up. Most people have little or no control over their career development and particularly in time of crisis can find themselves redundant through no fault of their own. In France, a long series of suicides at France-Telecom has brought workers’ stories into the media — they speak of being disposable, “treated like Kleenex”.

Capitalism wastes social cohesion. A capitalist society is one which naturally creates huge inequalities and even in the richest countries millions are left on the margins or excluded. The European Union officially acknowledges the presence of 80 million poor people; in the United States, the CEO of a large corporation is routinely paid at least 400-500 times as much as his or her average employee. The wealth of the top one percent of Americans used to be 8 percent of the total—today it is three times that.

The world’s 80.000-plus transnational corporations are experts in tax avoidance, making full use of transfer pricing and tax havens to escape contributing their fair share to the social and public services of the countries where they make their profits. As everyone knows by now, bankers and traders continue to receive huge bonuses despite the devastation their casino-capitalist methods have wreaked on their fellow citizens.

The increase in inequalities and the breakdown of social cohesion are closely correlated with phenomena as different as rates of alcohol and drug addiction, physical and mental illness or obesity; crime, homicides, delinquency and prison populations; premature pregnancies, infant mortality and life expectancy — the costs are high for everyone, even the rich.

Capitalism wastes resources through such well-known techniques as “planned obsolescence” and deliberate introduction of minor innovations made desirable and “cool” through mass advertising. In at least one major European city, Vienna, as displayed in a recent film, any bread left unsold during the day is thrown out and removed to the public dump by fleets of lorries — rather than being distributed to the homeless and the needy (or simply selling it for less on day 2 or producing less bread). Huge percentages of energy are wasted before doing any work at all and in many countries huge quantities of food are spoiled in storage, processing and distribution before reaching any consumer.

Capitalism even wastes money. In the United States, less than 20 percent of all investment is directed to the actual production of goods and services whereas more than 80 percent is invested directly in financial products. Many of these products are “collateralised debt obligations” or other derivatives with little or no social value. Currency trades alone absorb $ a day.

Most seriously of all, capitalism devastates nature — literally laying waste the planet, compromising the continued existence of human habitation, at least under conditions one could describe as civilised. This system has proved itself unable to supply even the most basic basics, like food and water to all its inhabitants. To continue, it needs up to five or six other, unavailable, planets.

Defenders of the system underscore capitalism’s undeniable capacity to promote innovation. True, its expansion, as in China, has allowed tens or hundreds of millions to escape dire rural poverty. But its costs and its inbuilt, ingrained wastefulness now far outweigh its benefits. Capitalism has outlived its usefulness. Enough is enough.