Chapter 1: LIMITATIONS OF CAPITALISM
4. Capitalism has been reaching its limits.
Four Limits
Predicting that capitalism will not collapse easily does not mean unconditional optimism that capitalism has no limits and is eternal. Rather, capitalism today seems to have exposed its decisive limits in at least four critical ways.
Limit (1): Environmental unsustainability
The most fundamental limit is that the global environment (ecosystem), which constitutes the conditions for the survival of human society itself, will not continue as long as the capitalist production system continues.
In particular, "global warming" is understood to be caused by an increase in greenhouse gases as a result of capitalist production activities since the industrial revolution, unlike past climate change.
It is also the "After the Banquet" of the capitalist economic growth unfolded by the advanced capitalist countries such as Western Europe, North America, and Japan. China led India, followed by Russia and Eastern Europe, which "returned" to capitalism, and the African continent, which is belatedly entering global capitalism with its natural resources as a weapon. Thus a wave of capitalist economic growth is brewing across the globe.
The global environment has been sufficiently damaged by the capitalist feast of less than a billion people in Western Europe, North America, and Japan. If all the rest of the world were to repeat the same thing, how much would the global environment be damaged? This is the terror of the unknown.
Precisely because people are already aware of this to some extent, in the era of global capitalism, global environmental issues have been raised with greater force than ever before. Still, as symbolized by the issue of greenhouse gas emission regulations, the interests of advanced countries that have already reached a certain stage of development and the ambitious emerging countries that are chasing and overtaking them tend to be in sharp conflict.
It is natural for emerging countries to want to avoid environmental regulations that could become a drag on their growing economic activities. However, the situation is the same for the developed countries. Since capitalism is originally a "quantity economy" in which capital accumulation is the self-purposed goal, It is reluctant, under any pretext, to any regulation that puts a brake on production or forces it to adopt costly production methods. Thus environmental regulation and capitalism must inherently clash.
Although the conventional debate on the global environment tends to be overly biased toward the so-called global warming problem, the global environmental problems facing modern society are not limited to that, including various other problems such as air, water, soil, acid rain, forests, hazardous substances, radiation protection, biodiversity, etc. So the time has come to deal with these pressing issues comprehensively and interrelatedly, and to formulate concrete numerical criteria that go beyond mere slogans.
To that end, it is necessary to adopt an ecologically sustainable planned economy that directly regulates not only the production method but also the amount of production while applying numerical environmental criteria. It needs to be introduced on a global scale.
However, such a thing is impossible as long as the capitalist production mode in which each country's capital enterprises develop production activities competitively based on individual management plans is maintained. At best, we have no choice but to limit ourselves to indirect regulations such as the imposition of an environmental tax. Even so, there are not a few countries that are hard to realize it due to the resistance of the economic world. Here, the limits of capitalism are so exposed that even apocalyptic prophecies of human extinction are not exaggerated.
Limit (2): Instability of life
In recent years, the expansion of income inequality as a result of neo-liberalist or capital supremacist policies has often been criticized. But the problem is not the inequality itself. Even if there is an astronomical income disparity, humans will not be dissatisfied if they are able to live reasonably stable lives. This may explain part of the reason why the proletarian revolution has never occurred in the United States, where income disparities are large.
However, the globalization of capitalism has increased the instability of life beyond inequality. This is because, under global capitalism, the business cycles that are inherent to capitalism, which by nature avoids planned economies, continue to occur on a global scale, directly impacting the lives of the general public in each country. The Great Recession of 2008 can be said to have been a typical and unprecedented event of the globalization of such life insecurity.
In the midst of this great situation of insecurity in daily life, job insecurity and old age insecurity are also contained within. In addition to the motor revolution, which had already been experienced long before globalization, the computer revolution, which coincided with and was driven by globalization, has increased the productivity of capitalist enterprises as a whole, and they no longer need as much labor as they did in the past. The development of knowledge-intensive industries has also reduced the amount of labor required.
Adding pressure to cut labor costs to respond to global competition, employment is dwindling. Under global capitalism, the phenomenon of "employmentless growth" that is constantly accompanied by this kind of employment instability - a broadly defined "anxiety" that includes unstable employment - will also become common.
On the other hand, public pensions, which are the main source of income for the majority of ordinary workers after retirement, were a product of an era when the average age was short and the rate of aging was low. However, at a time when the state's financial crisis is deepening, danger signals are beginning to appear in its sustainability. In addition, low-wage workers and long-term unemployed people who lack the means to pay pension premiums are likely to receive low pension benefits in the future or even lose them, further exacerbating their anxiety about their post-retirement lives.
This constant instability in people's lives will lead to restrained consumption by the general public, and the long-term economic stagnation due to sluggish sales will become a factor in chronic recession, weakening the strength of capitalism itself.
By the way, although emerging and developing countries have seen an overall improvement in living standards as a result of capitalist economic growth, they also suffer from economic vulnerabilities peculiar to emerging countries, and instability of life due to long-term political turmoil and deteriorating security. As a result, people are migrating to developed countries in large numbers in search of a more stable life. This is an paradoxical immigration phenomenon peculiar to modern capitalism, different from outbreak of refugees caused by starvation.
Furthermore, the increasing frequency of abnormal weather and the progress of rising sea levels are raising threats to life year by year. These threats bring about instability to all humankind, regardless of race or class, but it is already clear that capitalism cannot fundamentally solve this problem.
Limit (3): Stagnation of technological innovation
Various technological innovations, such as scientific technology and information technology, have often been touted as a brilliant achievement of the developed capitalism since the 19th century. Certainly, the fact cannot be wholly denied. However, all technologies supported by capitalism are limited to those that contribute to the expansion of profits of capitalist enterprises. In plain words, it is a technological innovation that becomes a means of making money.
Therefore, even if the idea of a technology itself is excellent, if the development or commercialization of the technology requires a large amount of cost, or if the beneficiary of the technology, and therefore the purchaser is a minority (for example, the disabled), it will be left behind from the capitalist technological innovation.
The development of information technology since the latter half of the 20th century has been praised, but in fact, it has reached a plateau in the 21st century, and it remains in the form of continuous improvement of existing technology. This is because technological development is facing limits in terms of cost issues and the size of the product market in the information technology field, which is a treasure trove of ideas.
Similarly, renewable energy technology and the development of products with a low environmental impact have been promoted as slogans, but have not made remarkable progress in the capitalist system that prioritizes cost and profit, and have plateaued.
On the other hand, even if the beneficiaries are limited, if the technology can aim for a high level of profit, innovation will be promoted even if it is anti-human. The most prominent of these is the development of high-tech weapons. Buyers of high-tech weapons are mostly limited to sovereign states, but since the customers have the largest purchasing power on earth, high-tech weapons are at the forefront of capitalist technological development as high-priced products with the largest profit per unit.
Ultimately, although capitalist technological innovation has progressed year by year solely for the sake of making money, it can be said that technological innovation as a whole has been forced to stagnate from the perspective of human history.
Limit (4): Human desocialization
Capitalism stimulates the selfish side of human beings, and in particular, it maintains itself through human attachment to money as its ethos. Capitalist economic competition boils down to competition for money. Keynes has a point, albeit somewhat schematic, in trying to see the ethos of capitalism in "love of money" in contrast to communism, whose ethos is "service to society."
As I mentioned earlier, since the dissolution of the Soviet Union, as capitalism has become a kind of ideology in the midst of globalization, the selfish side of human beings has even been actively praised, and the number of egomaniacs has increased. On the other hand, the affluence of consumer life, the greatest field in which capitalism has triumphed over collectivism confused with communism, has cut human beings into individual consumption units and made them desocialized captives of commodities.
In general, humans in general have lost their sociality, which has led to the deterioration of their humanity as social animals. At the individual level, this promotes mental childishness. Egoistic humans with underdeveloped social skills perceive, like children, that the world revolves around them (me), even if they are adults. This phenomenon of enlargement of the "self" is almost always connected to the root of various modern social pathologies.
The loss of human sociality also promotes the dissolution of "society" at the social level, specifically the disintegration of local communities and even family relationships, which in turn leads to the social isolation of individuals. Even among capitalists, it has become to call for the restoration of "social bonds."
