Capitalism's Flaw: a Cycle of Failure then Possible Rebirth

Sadly, capitalism has become a dirty word in some circles, especially amongst young Westerners. I don't blame them. If my best-case prospect was 30,000 USD in debt (credit, car, and student loans) by the age of 24, I'd be against the system, too. 

But capitalism isn't the problem per se--it's the way adults have engineered the economic system with lenient banks. Too many people fail to realize how much the U.S. dollar--or any empire's currency--has been propped up by military force and the slave trade. 

The United States and Mexico, 1821-1848 ((c) 1913, 1969)
by George Lockhart Rives

Most young people do not know that England occupied Havana, Cuba in 1692 in part because of its strategic port; that Guantanamo Bay and Hong Kong are consequences of superpowers legally occupying weaker countries to perpetuate subservient relationships; that a treaty, Utrecht in 1713, specifically gave the British an exclusive license to take captured slaves to the Americas for sale and labor; that in the next phase of empire handover, Spain hastened its decline by supporting the English against France (choose your allies carefully, especially in wartime, when shifting allegiances are common); that the idea of absolute monarchy only crumbled in 1812 thanks to both French and American Revolutions; or that Mexican law (as of July 13, 1824, before America's 1863 Emancipation Proclamation) prohibited the slave trade; that the March 11, 1827 Constitution of Coahuila (Mexico) and Texas expressly declared, "in the [Mexican] state no one is born a slave"; that America invaded Nicaragua in 1912, Haiti in 1915, and the Dominican Republic in 1916 (because the Dominican Republic owed Wall Street money); and so on. 

Averell "Ace" Smith in Commonwealth Club Magazine (2019)

The American conquest of Mexican territory in 1848 is significant in that it created a playbook for Wall Street involvement: 1) create a pretext to invade; 2) take territory from the weaker country; and 3) force the country to go in debt in your currency. 

Published by Colegio de Mexico

This same playbook backfired severely in Germany when dominant powers imposed financial terms and conditions paving the way for demagogues, who always arrive with scapegoats in hand. (Ironically, it was a German philosopher, Immanuel Kant, who created a universal moral law in 1785 that should have assisted future German populations: "Act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means.") In those days, the world learned from its mistakes post-WWII, creating a Marshall Plan that led to defeated Germany and Japan becoming superpowers and stable trade partners. Today, no one believes Iraq--attacked and invaded twice by the United States--will ever become a superpower or more than an oil supplier. 

Domino effect on debt non-repayment usually leads to a crisis.

Whither Western capitalism? Within historical context, it's hard to believe capitalism has ever worked an honest day in its life. To recapture the hearts and minds of young people all over the world, capitalism needs honest, sincere politicians, diplomats, and journalists. Currently, all of the aforementioned are MIA. Until that changes, we might as well prepare the obituary of capitalism--and our young. 

© Matthew Mehdi Rafat

Bonus I: John Swinton, late 1800s: 

I made the acquaintance of Wendell Phillips and found that he, too, had come to similar conclusions. He believed that the capitalist system was steadily undermining the world and bringing his countrymen into a condition quite as wretched as that of the slaves; and he vehemently condemned it.

Bonus II: Wendell Phillips (1861): 

I think the first duty of society is justice. 

The nation which, in moments when great moral questions disturb its peace, consults first for its own safety, is atheist and coward... Slavery has made our churches of Christ to churches of commerce. 

Despotisms are cheap; free governments are a dear luxury--the machinery is complicated and expensive. 

Were safety or security the first objective of human society, this principle, "if unlimited, false... [and] unqualified, it justifies every crime, and would have prevented every glory of history... But grant it. Suppose the Union means wealth, culture, happiness, and safety, man has no right to buy either by crime." 

Look at our history. Under it, 700,000 slaves have increased to 4,000,000. We have paid $800,000,000 directly to the support of slavery. This secession will cost the Union and business $200,000,000 more. This loss which this disturbing force has brought to our trade and industry, within 60 years, it would be safe to call $500,000,000... slavery has been strong enough to rule the nation for sixty years, and now breaks it to pieces because it can rule no longer. 

Bonus III: Alexander Hamilton: "Justice is the end [goal] of government. It is the end [goal] of civil society." 

A Land without a Crucible: How to Appropriate Cultural Collapse

In Trump's America, liberals have been reduced to 1) begging for money from the government, blind to the military-industrial complex's willingness to give them as much or as little money to keep them occupied as long as defense expenditures grow (one dollar for you, ten dollars for me); and 2) antagonizing every different-minded man, woman, and child on their quest to save the country. 

Warren Hinckle's characterization of American liberals has never been more apt: in 1973, he called them "horror[s]" because of their tendencies towards "self-righteousness and self-importance." (Another Hinckle gem: asked why he worked in conservative bars frequented by police officers, he responded if anyone could find a good liberal bar, he'd visit one.) 

Today's liberals can tell you about the Gulf of Tonkin but not why such an incident would be allowed to occur, or why otherwise intelligent people would feel compelled to engage in such maneuvers. Some might know about "domino theory" but not why it--and laying down dead body after dead body--would be considered reasonable in light of all available intelligence. I've heard the best minds of my generation rail against biased media (aka propaganda) using the terms "collateral damage" and "cultural misappropriation" without irony, captaining the English language to advance misunderstandings down empty harbors. Modern-day radicals are more likely to go apoplectic over a friend's recycling habits than wedding diamonds that, even if not bloody, destroy the earth while tilting local economies into de facto slavery. (Yes, Australia has done well with mining--it's the lack of economic diversification without proper safeguards that's the issue.)

Banally, America's intellectual malaise isn't intentional, making it harder to identify villains and vanquish them. I recently attended a Berkeley, California event celebrating books and, one might assume, critical thinking. Yet, every interview was the equivalent of a slow pitch softball game (no offense to softball players, some of the toughest athletes out there), as if organizers believed their primary job was to ensure audience members wouldn't face foul balls of complexity. Lesson: never choose interviewers who are friends or colleagues of the speaker. There's a reason journalism exists (existed?) as a profession--to create independence and therefore more freedom to ask difficult questions. Perhaps sponsors believed if they weren't nice, speakers wouldn't return, but anyone incapable of discussing potential deficiencies in his or her ideas isn't worth inviting back. 

Another lesson: whether intentional or unintentional, the result is the same. (Bonus, on war: "What does it matter to the dead, the orphans, and the homeless whether the mad destruction is wrought under the name of totalitarianism or the holy name of liberty or democracy?") None of the book festival's inanity was by design, or rather, everything was done to maximize happiness and to promote ideas. (At least they didn't require people to submit questions on index cards or limit themselves to two minutes.) 

At one booth, I discovered a book selling for 17.95 USD available for 9.99 USD online and asked for a discount. The vendor said he couldn't compete with Amazon because "we can't lose money on every book we sell." I responded that after building the online infrastructure, including the delivery infrastructure (initially subsidized by consumers paying for shipping), Amazon and publishers were both making money pursuant to an agreed-upon price split. It's true Amazon's R&D expenditures and forays into new areas (e.g., a mobile phone) cause it to report losses, but Amazon is no longer losing money on most book sales, especially not on the Kindle. (It does take a loss on some books like Harry Potter but gains brand loyalty as a result of its discounts and events.) Hoping to engage on a difficult question, I wondered out loud how brick and mortar bookstores could compete in a modern capitalist economy. Devoid of ideas, the vendor shrugged his shoulders and gave me a curt goodbye as his final rebuttal. At no point did he reveal any shame in opening the conversation with a misrepresentation. If we are living in a post-truth society, the cause is our post-humility culture. 

Former NY mayor Michael Bloomberg in National Geographic.

At another event, cultural appropriation was mentioned negatively, inspiring a well-meaning African-American audience member to explain the issue was rooted in economics. Meanwhile, none of London's black or brown residents would think to complain about their city's most popular food, the colorful chicken tikka masala. (It's as if the British have bigger fish and chips to fry.) Unbeknownst to most Americans and Europeans surrounded by dozens of foreign restaurants is a real-life government conspiracy: stealing the best people and ideas from other countries by any means necessary. Such a plot has existed since humans realized it was easier to steal than to invent, to build, or even to maintain the infrastructure--both physical and abstract--necessary to accept change gracefully. 

Stealing and appropriation occur because they allow Country A to gain the benefits of Country B's inventions with as little displacement or sacrifice as possible--at least for Country A. Immigration, something I've heard liberals support, is literally cultural appropriation personified. Unless the goal is to build walls or ghettos--something I've heard liberals oppose--the main reason different people should enter your hamlet or megapolis is so you can discover the best they have to offer until you're the lovely country of Indonesia but without the pollution, traffic congestion, and banking crises. 

Any other philosophy means you support using people for labor without any meaningful exchange of ideas, something Immanuel Kant warned us about in 1781: "So act that you treat humanity, whether in your own person or in the person of any other, always at the same time as an end, never merely as a means." (I remember when liberals told us melting pots and mixing were good for society, then they told us they meant we should be like salad bowls (healthy, with distinct colors), and now I think they're saying we shouldn't mix at all unless everyone pays for every idea they stole. I can't predict the next iteration, but I suspect lasagna will be involved.) 

Why we are discussing imposing informal or formal rules on what people should do or say rather than a more equitable process to capture or spur innovation, I don't know. Such discourse would require complex knowledge of different disciplines, along with sustainable funding mechanisms for new ideas that protect the displaced. To this end, I just want to say one word to you. Just one word. Philosophy. There's a great future in it. Will you think about it?

© Matthew Rafat (2018)

"Our drones will never be called terrorists, and our guns will never defeat nationalism. We change the world by how we look at it." -- Pico Iyer