The Religion of Capitalism

Certain types of people – often, but far from always, libertarians – like to refer to socialism as a religion. Some academics are also into this, referring to it as having a “teleological conception of history.” This kind of thinking is right up there with “socialism is a nice idea, but it can’t work in real life because people are mean”  on the list of popular misconceptions about socialism.

Socialism is not a religion. Stalinism, sure – as with any dictatorship, you have to convince yourself of some pretty strange things in order to accept the absurdity of one person ruling over everyone, and to ignore the horrors perpetrated in the name of that person. But Stalinism is not socialism. It is the opposite thereof. And that’s not the point of this post.

Socialism is also not some kind of hippie let’s-all-be-friends utopia. Part of why the whole 60s counterculture movement was such a miserable failure when it came to politics is precisely because it did not understand this. Socialism isn’t about changing cultural norms. It’s about how we organize the economy and the power structures of society. And that’s it.

Let’s take the desert island metaphor. A bunch of people are stranded on a desert island with limited resources. How do they organize themselves? Socialism suggests that the best thing to do would be to think things through, consider the amount of resources and what needs to be done, and proceed on the basis that:

  1. Everyone is equally entitled to survive and to feel well, and that that should be the purpose of the economic and political organization of the desert island.
  2. Everyone should get a say in what is to be done, especially as it affects them personally.
  3. It is better to plan what to do with the limited resources and to use them according to principles of logic.

In terms of our real situation, socialism is a scientific analysis of our economic system, and an attempt to create a system that is more balanced and more successful at meeting the needs of the population, while giving people more control over their environment – which, after all, is the point of democracy.

But what about capitalism? What would capitalism do on a desert island? The central concept of capitalism is the profit motive. Everyone does everything to gain profit, to promote their own cause, and this causes everyone to live a better life. Or, alternatively, the worthy succeed and the unworthy perish. Depends on your denomination, I suppose.

We all know where this would lead in the desert island scenario, right? It leads to collapse. It’s just not sustainable – no matter how you turn it. The people on the desert island have to cooperate, or they’ll die. They have to think of what exactly they are going to do with their resources, or they will starve. They can’t have one or two people who rule them and get everything while everyone else fights for scraps.

I’m not telling you anything new. This is the oldest of human stories. It’s the story of human civilization.

Capitalism is the belief that you can build a system around greed, and that the Invisible Hand will make everything be OK. But, as socialists have been pointing out for decades, there is no Invisible Hand. You cannot have stability without logic and planning. Capitalism may have been a good thing once, a step forward; no-one is denying this. But that was a long, long time ago.

And now capitalism is collapsing, more or less exactly as logic suggests that it would. No matter what the governments do, nothing is working, including all the old tricks that got the system out of its recessions. The numbers are clean and undeniable. You see it every day: stocks are falling to record lows, unemployment is going up in incredible amounts, governments are collapsing, and so on. And yet, people are acting as if this was surprising. As if it was unanticipated. Even worse, they are acting as if soon everything will be OK again, because the Invisible Hand will make it so.

If there is any economic system that is based on a deluded and deluding kind of faith, it’s capitalism. Capitalism with its magical free market, its Invisible Hand, and its belief in the power of human greed. Like the worst fundamentalists, the believers of capitalism want to deny reason and logic, want to deny science, and replace it with their equivalent of Creationism. But pseudoscience does not hold a failing economy together, and flapping your arms and believing (or yelling that gravity is just a discourse, for that matter) will not make you fly.

Let’s just hope people realize that before we all hit the ground.


  1. The simple reply is that it didn’t, or at least not recently. It took a world war to bring the system out of the Great Depression.

    And even when it did work, it wasn’t exactly a brilliant or stable system. It was a step forward from where we were before, but it couldn’t last. You can’t just take a single step forward if you want to keep on walking.

  2. Nate

    I must admit, I had always been dubious of the capitalist system — in fact, doubtful of how many of today’s government and social structures are run. I have a lot more confidence in open systems than closed ones because of their transparency and the freedom of individual contribution. Technology has shown that open systems can be highly effective and very successful — open source software, Wikipedia, science and mathematics in general, etc. These have not degenerated into chaos from the bottom-up contributions of countless contributers — every day people even.

    The ability for anybody to openly examine and modify the content and structure of these open systems aid to identifying and preventing the exploitation of system. Sure, Wikipedia articles have been known to occasionally be vandalized, but they are rapidly noticed and corrected. In closed systems this is often not the case — especially when the content is hidden from public scrutiny.

    I use Linux, and one thing I have always been amazed at is that security vulnerabilities can be identified and corrected, and very quickly updates are available to be downloaded and installed. This speed and effectiveness is not often seen in closed source software. In many closed source software packages marketable bullet point features are more important than bug-fixes.

    How is this relevant? Governments (policies, laws, structure, procedure, etc) is very much like software. It’s a program that’s executed by millions of people. To complicate matters more the data inputed into the program is fuzzy, abstract, chaotic, ever changing. A closed source government can build up a lot of rigid legacy code that was written at a time when the data was different or was designed with faulty assumptions in mind — and it’s impossible to test and debug before it’s implemented. Anybody who writes software knows that old poorly designed code can lead to many headaches and it is often better to refactor, and perhaps even completely rewrite from scratch, large portions of code. With the government’s current configuration this is not a simple process — resistance is met all along the way and many problems are never fixed.

    Worse still, there is a strange emotional attachment many people have to the old design ideas. It’s considered un-patriotic (even un-American) to even consider alternative possibilities and many people become violently defensive. We have to keep in mind, however, the world has changed dramatically since the time of our founding fathers. Remember, even the best programmers in the world cannot write bug-free code and as coding requirements change legacy code becomes invalid.

    Today we can instantaneously communicate and interact with people all around the world. Today we have technology making the thoughts and actions of individuals more important than ever. The top-down rulership of a relatively small elite group made sense in the past, but now technology can enable a highly effective bottom-up approach. People should not need to be career politicians to have an influence on the world. I would much rather put my fate in the hands of professors, writers, researchers, farmers, office workers, anybody and everybody, because when they see that something is not as good as it could be they should not be powerless to making improvements. Career politicians, first and foremost, tend to care about their own careers which can interfere with their ability to do what needs to be done.

    I know this comment is rather long, convoluted, and somewhat off topic. Your post was more specifically Socialism vs. Capitalism and I veered off into government, but it is not too unrelated. Capitalism is all about the top-down rulership approach. Socialism seems to be more of bottom-up structure. Capitalism is closed as individuals have no say when, where, or how resources are used. Socialism is more open, so anybody could identify needs and take action to solve problems.

    I actually think that it’s a matter of time before Socialism becomes almost inevitable. The best the Internet has to offer is highly attuned to Socialist attitudes, it’s only a matter of time before the rest of the world catches up. Socialism may not come through revolution, or by overthrowing any government, but by a natural gradual progression toward that direction.

    In a time of economic decline this shift may be accelerated. Consider a website which makes it easy to connect people in need with people having an abundance. Perhaps someone enjoys gardening and growing vegetables; it should be easy for this person to give some away to starving families. Perhaps such a website already exists?

    One thing about Capitalism I don’t particularly care about is the uneven distribution of wealth. Chain stores, franchises, big businesses pull a lot of money out of small communities. It always offends me when I see Wal*Mart commercial claiming to help communities by providing jobs — as if the inflow of money from minimum wage work offsets the large quantities of cash leaving the area. Products are always made someplace else — out of town, out of state, possibly even out of the country. I live in a small town that has been shrinking for a long time. I can’t help but feel the area is being bled dry. The short-term savings of low priced items are leading to large losses. Few locally owned businesses can compete — making less and less money remain circulating in the area. If you live in one of the areas where the money is going it might be nice, but if you live in an area where the money is coming from it’s not so good.

    I tend to write too much whenever I comment. Sorry about that.

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