I would like to preface by saying I am very sorry if this is the wrong community. This post touches on the core philosophy of Marxism, and I was hoping to get some insight.
My friend claims that the only reason companies produce things is because the working class, regular citizens, are asking for it; he does not get behind the idea of companies subconsciously persuading people to buy the items they sell. He believes that because your regular person wants a new phone, kitchen equipment, clothes, whatever - they are pushing capitalism forward and therefore it is the right / natural system.
How would you reason? I feel conflicted. On one hand, people do want things and there is almost always something to produce it for them, but on the other hand companies are steadily pushing for profit, using various tactics to drive consumerism. I would appreciate what you guys think and what you would answer, because according to him, capitalism only exists because demand exists. Whether that’s true or not, I hope we can discuss. Cheers!
He’s confusing market economies with capitalism.
Market economies can exist without capitalism.
A lot of people think that anything to do with socialism means a USSR style planned economy, but socialism can utilise markets. In fact, ironically, truly free markets can only exist under well regulated markets.
Capitalist corporations want as little regulation as possible so they can influence the markets and do other capitalist shenanigans, like selling at a loss until you’ve cornered the market and then hike prices up.
Capitalism is like the malignant form of market economies.
Extending for clarity: Capitalism is where owners extract more value from a business than they put in through work or risk. This is not to say that ownership alone should receive no compensation; putting your own capital at risk by investing it into a business should get some compensation - provided that the risk is real.
The problem arises when that compensation is wildly greater than the “risk” or work provided, because that unearned differential has to come from somewhere, and it invariably comes from shortchanging non-owner labor. Say you have a labor force of 100 people, but as a group, you’re only compensating them 80% (ha) of what their labor is actually worth, and diverting the 20% into your own compensation. This means that, as a group, you have 80 employees and 20 slaves, or that each worker, on average, is 20% slave.
socialism can utilise markets. In fact, ironically, truly free markets can only exist under well regulated markets.
Would you mind elaborating on this point? I imagine, in a primarily socialistic society, exchange/trade would work provided that companies were nationalised and the workers owned the means of production. I would love more enlightenment though!
companies were nationalised
This still wouldn’t mean they aren’t in the market.
People have this weird notion of everything related to socialism being somehow planned and preset by the government. That’s a planned economy, something communism utilises, but which isn’t anywhere in the definition of socialism.
Socialism is defined by the government owning OR regulating the means of production.
So for instance the social democratic countries in the Nordics, while often described as “a mixed economy” are just very well regulated market economies. So well regulated in fact, you could call it socialism. And “social democracy” is a socialist philosophy.
I’m not one for false dilemmas, and the whole “socialism/capitalism” divide is one, as “pure” capitalism doesn’t exist anywhere. Even the bastion of capitalism, the US, knows that without certain policies (which are arguably socialist in nature, although that doesn’t mean the US is, just the policy), capitalism would fuck the economy up in the blink of an eye.
That’s why they have antitrust laws.
to regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies.
Because that is what is needed for a free market. A free market is often defined simplistically as when only the price and quality of the product determine the market situation.
In a capitalist market though, that’s never the case, as the companies/people behind those products can do other things as well. You could never compete with McD even if you made absolutely amazing food for half the price they do, since anytime you outperform them, they could just det up shop next to you and literally give away free food until you go bankrupt, because McD has >40 000 restaurants across the world, so losing money on one wouldn’t matter to them.
Thus they wouldn’t be influencing the market fairly through the supply and demand of that market, but by unfairly distorting the competition because of the capital they wield.
Capitalist markets always put profit on top of everything. Everything. A country (such as one of the Nordics) can still value profits, but if it’s putting societal welfare, labour protections, etc above profits at any cost and regulating markets to achieve that, I’d say one could argue they are socialist, by academic definitions.
And oh boy am I excited to once again argue the people who get mad when I call Nordics socialist. I’m Finnish myself, btw, and while I recognise the “mixed” nature of our countries, and that we have a lot of people who are capitalists and try to get rid of the regulations, we still have a lot of regulations and welfare compared to most countries.
If you’re genuinely interested, here
https://en.m.wikipedia.org/wiki/Market_socialism
Although the system we have in the Nordics isn’t quite as… red as what is most commonly thought of as “market socialism”, but as the article mentions:
Various models for such a system exist, usually involving cooperative enterprises and sometimes a mix that includes public or private enterprises.
For one our liquor stores are all the same, “Alko”, and Alko Oyj (OYJ = PLC) is owned by the government. Maintains excellent quality for liquor stores, and even makes a profit.
It has public shareholders who get dividends. Still owned and operated by the government though. Doing great, as well. And a great place to work, I hear. Definitely nothing like, say, LIDL, who hire inexperienced workers who’s rights they ignore and then exploit. Which sort of shows me the core difference in what I’m saying.
The difference isn’t much, but still matters a lot.
So essentially if companies just stopped being greedy, everyone just got a reasonable amount of profit instead of “the most we can get by any means necessary”, we’d have a really good system already. One in which plane companies wouldn’t be trying for profits so desperately they leave out bolts from doors and then have to assassinate people who blow the whistle on their bullshit.
Thank you for this excellent writeup.
Thank you for appreciating it. Feels guud
People “want” religion the same way — they’ve been raised on it, and conditioned to include it in their value system.
All of those things can be produced without capitalism. Demand doesn’t explain why this mode of production is used over another.
I’d say it’s bit of both. Capitalism offers solutions to legitimate needs/wants of people, but more frequently than not the wrong ones. It can be seen through housing scarcity and other necessities not being addressed correctly. Giving wrong solutions to issues doesn’t resolve them, allowing capitalists to get more out of the issue. Sometimes they will go as far as create an issue for people, so they can sell them a (wrong) solution to it.
@[email protected] has already given you a good answer.
But just ask your friend if he would (all else being equal) prefer to buy from a co-op where all the workers get a living wage and a fair share of the profits.
No profits siphoned off by idle shareholders, who don’t spend it locally and more likely than not route it via a tax haven to eliminate all the benefits to any economy, least of all the local economy. Because they will use the money they don’t need to buy up all the stuff the rest of us do need, so they can charge us extortionate amounts for access to basic means of survival (while refusing to pay a living wage for the labour that produces their profits).
Now ask him why it is almost always impossible to find a co-op alternative, even if you’re willing to do a lot of (unpaid) work researching the options.
He’ll never get anywhere if he starts from the position that things are the way they are because the broad mass of people want them to be that way. That’s not how it works.
He’ll never get anywhere if he starts from the position that things are the way they are because the broad mass of people want them to be that way. That’s not how it works.
Very true.
That sort of thinking is known as the “is-ought problem”; “because things are this way, I must conclude they ought to be that way”
even if you’re willing to do a lot of (unpaid) work researching the options.
This is something that my brain has been musing over lately - if we think of managing the economy on a spectrum between perfect planning of every aspect of it one one end to perfect free market and zero planning on the other. Moving from planning towards free market on the spectrum results in shifting planning work done by few to market research work done by everyone. Even if we assume that it works in the theoretical efficient case, the free market doesn’t magically organize the economy without extra cost. The work is still being done, it’s just outsourced to and made the problem of everyone. On a secondary point, anecdotally I don’t think people are particularly keen on doing this work. If given the option of having one vendor of things that supplies what people desire at affordable prices, people are happy to never look for another vendor. And why would they, few people would go do price comparing in their spare time time, after they’ve finished their 8-10 hour workday. Then we’re all surprised Pikachu faced that we always end up with few large corpos in every sector that supply the vast majority of products in that sector. It seems to me that assuming the consumer market research work “just happens” is a major flaw in the pillars of some common economic theory.
I’m not advocating for any particular point on this hypothetical spectrum as being the correct one. I simply used it to explain my thoughts.
It’s a mix, IMO. There’s tons of stuff pushed by companies to get you to buy things you didn’t even know existed. There’s tons of stuff that companies force you to buy by unbundling products. There’s products you essentially must have to get by in a modern society.
There’s plenty of manipulation of desire by companies. That’s what advertising is. Doesn’t matter how it’s done, via conventional ads or product placement in movies or products talked about by influencers. You may not have known about or wanted something, but they’re going to do their best to make you want it and buy it. This is probably the biggest facet of the argument. Companies are always trying to make you buy what they’re selling whether you need it or not, and there’s nothing subconscious about it. They’re in your face as much as they can manage. They want you to see it, but whether or not you recognize it as deliberate or not is worth mentioning. They spend millions to find out how much they can charge, how artificial scarcity could manipulate pricing, how long a product should last before the next iteration shows up they want you to buy or not piss off the buyer when it fails and they need to replace it.
There’s plenty of stuff you can’t really do too well without in society, like a mobile phone or car, so I’m not sure if I could reasonably argue about these kinds of items because of their necessity. You’re going to buy something like this, the only question is which company’s marketing wins and the $ in your pocket.
Pushing capitalism… that’s a question of who is in charge of the system. While there may be some hypothetical debate over what could happen in an ideal system with honest players who each ideally exercise their abilities in the system, the reality is that the consumer has little to no control over capitalism.
Capitalism is driven by billion- and trillion-dollar mega corporations that control what you see, hear, eat, wear, drink, drive, and every other facet of your life that interacts with products of any sort. That’s just the direct attempts. We haven’t even gotten to you seeing what your friends are wearing, what they’re driving, what they are watching, etc. That influences the viewer as well. Companies are constantly striving to dictate what you want to buy and working hard to extract the maximum price the market will bear. They want you in their walled garden. Sure, the consumer might have a hand in directing trends, maybe occasionally get a product to fail due to popularity or poor function, but overall the consumer has little hand in consciously directing what companies make. I think your friend really hand-waves away the amount of effort and money companies spend to make you want to buy, and buy their products. IMO they’re not being honest about that.
Lastly, I think the whole idea of capitalism exists because demand is sort of false because it assumes that capitalism is the only way to do it. I’m not going to argue for any other system, but it’s patently obvious that before capitalism sort of became the default that products and services were generated and traded or bartered for over centuries. It’s just that regulated capitalism does it faster and more efficiently for more people.
I think this comes down to a persons definition of capitalism. For some its the idea of exchange of goods and services. For others it starts at virtualizing value with tokens. For others its the idea of ownership of land and natural resources. Others personal property in general. For others its about laws that start getting into virtual entities of production/consumption like corporations. For others its meta things like interest. And none of these generalities would fit any particular persons things as its about some parts but not others. I myself am shifting to what I think of as anti corporatist which many might see as anti-capitalist. Its sorta funny but citizens united drove me to anti corporatism and Qanon flipped me to full athiesm.
Production exists to satisfy demand that’s right. And nothing about that is any different under socialism or communism. Whether people want a new phone or not is orthogonal to the fundamental problem of who controls production.
exchange of goods exists because there’s a demand for things. their type, the conditions of their production and the manner of their exchange is something else.
you can start right on page 26 of das kapital
https://www.marxists.org/archive/marx/works/download/epub/capital-v1.epub
The existence of the multi billion, if not trillion dollar industries of marketing, advertising, market research, “store layout specialists” or whatever you might call them, “consumer psychology” (yes, an actual thing), and so on and so on, all there to brainwash you from birth to not only consume, but consume “brand” x over y (the existence of “brands” in itself!), prove your friend wrong.
Literally everything in our life is commodified for profit, not only our basic needs and human rights like food, housing, healthcare, but also the made up concepts capitalism invents to “fix” our problems, which it created, like stress and burnout (or halitosis), with ideas like “wellness” and “mindfulness” and whatever else they can use to make us buy more while distracting us from the real cause of our problems and making us feel like we’ve done something for ourselves, when we wouldn’t need to be doing it in the first place if we weren’t existing in a for-profit society.
There’s also the whole “keeping up with the Jones’s” and “American dream” type propaganda they push to make sure we’re always “aspiring” (and so thinking like temporarily embarrassed millionaires and acting against our own interests). There is absolutely no need for there to be a new phone model being released every week, or for you to buy a new one every year, or for you to buy a new wardrobe every season to keep up with “fashion”, another industry there to sell the unnecessary (the concept of “fashion” that is, not clothes themselves) but they create a need with the industries I’ve mentioned already, but also with shit like planned obsolescence and artificial scarcity.The whole thing is a massive manipulation to get us to work hard to make money (mostly for the capitalists, but just enough for us) to buy a load of shit we don’t need to solve problems created specifically to sell us said shit (along with the things we actually do need, which are put behind a literal pay wall by, and) to funnel even more money to the capitalists, while they make us think it was all our idea. Your friend is proof of it. And while it might be uncomfortable for them to realise that they’ve been completely taken in by the propaganda, it just goes to show how well it works.
