The Price of Free Markets: The Irrationality of Capitalism and the Recognition that Another World is Possible

- By Jordan Bloch

There are, according to the department of labor, 137 million working people in the United States; 70 percent of them in the service industry, 30 percent in manufacturing. Some of them are rich, but most are poor. The median income in the U.S. is 40,000 a year, which is not enough to buy a new car. The poor rarely make more than is needed for survival, as can be amply shown by the downturn in discretionary spending. Too often the cost of living and the income of the worker are identical. Near subsistence wages drive the poor into the hands of the creditor, and without an exit from this poverty imposed debt cycle, the working class is excommunicated from official society. In 1997, 1.4 million Americans filed for personal bankruptcy. That works out to roughly 7,000 bankruptcies per hour, 8 hours a day, 5 days a week.

Ghettos spring up, owned by a community of landlords who alone will accept a tenant that has no credit. The rent levels in South Central, East L.A., the Roxbury areas of Boston, which are above market value, can only be understood as punitive rent, which is exacted as a character tax, giving example to Marx's comment on credit being the 'economic judgment on the morality of man.' The three most well-to-do people in the world today possess more wealth than the annual GDP of the poorest 48 countries. The richest 225 people in the world possess 1 trillion dollars, which is more than the annual income of half of the world's population, which lives on less than two dollars a day. Those who argue that globalization brings prosperity are not talking about the 100 nations which were worse off in 1998 than they were in 1983. They are presumably talking about the richest 5% of the U.S., whose wealth is greater than the combined annual income of the rest of the population. World capitalism, far from delivering its golden promises, has instead given the world a nightmare in which workers are impotent, and in which the only benefits that come to capitalists come at the expense of the majority. As in all other class societyies the freedom and prosperity of the few is predicated on the slavery and poverty of the many.

Many workers are worried about their job security, and all of them can do something about it. Socialism is the answer to job insecurity and poverty. It is only through a rationally planned economy that rational ends can be attained.

Why, the American asks, is there so little job protection for me? Because, the economist answers, job protection is a fetter for capital mobility. Where capital is mobile, labor must be mobile too. The dialogue, ending with a truism, seems neatly wrapped, but the ends are in fact loose. More questions need be answered. We won't content ourselves with Alan Greenspan's unreserved exaltation on the labor market's flexibility. We have to ask why capital must be mobile in the first place. The answer immediately presents itself: "so that investors can find the best market for their capital." We have touched on the secret of America's whole economic system. Millions of American workers have no job security because it is necessary for investors to find the best market, viz., profit, the desire of the few, outweighs the needs of the many. Ninety percent of national stock, owned by ten percent of Americans, dictates to the lives of the American population the level of comfort they will feel in their lives. That the present climate, that climate which stock prefers, is dreaded by humans leads even the casual observer to question the human value of the capitalist system.

It is only half true that the lives of workers are dictated by a minority of bosses. That is the subjective side of the worker's exploitation. The other side of it is that the institutions of stock ownership and of private property generally socializes bosses to clamor for greater profit and market share. Capitalists behave as they do on pain of extinction. Let us remember that the world of Adam Smith, William Petty, or Bentham existed before the writings of these men. It has never been necessary for anyone to teach capitalists that profit hunting is good; they just do it.

Because this government is set up to, as James Madison says, 'protect the opulent minority against the poor majority' the government refuses to aid and in fact obstructs a popular workers organization from gaining influence in the affairs of state. Poverty and inequality alone do not make a society unfree. Although we may join Adam Smith in saying that a society is unhappy if the majority of its population is unhappy, and we may join Marx in saying that the goal of capitalist society is the unhappiness of its members, we still have not gotten anywhere in defining capitalist society as free or unfree. It may be argued that only communist society is rational, and all non-communist societies are irrational and therefore unfree. This argument doesn't actually tell us anything about capitalism, communism, or freedom. What it does is to prejudice the listener against capitalism by semantically defining it as unfree. Those who argue like this are guilty of a persuasive definition.

The market ineluctably distributes resources unequally, and this follows from its nature of being based on undemocratic principles. The capitalist cell of production, or shop, is owned and controlled by a minority. What to produce, how much to produce, and how much to sell it for are questions which are all answered by the owner of the shop. The outcome is one which predictably represents his interests, and not the interests of the workers who run the shop, and only indirectly represents the customers of the shop. The capitalist produces only in order to sell, and will never produce more than he thinks he can sell, even if he is capable of it and you are needy. In Argentina, a country of 30 million, the poor starve despite the fact that the country can produce enough beef to feed more than 150 million people. The Argentineans are not vegetarians. The ranchers there would rather sell their land as hunting ground to Sylvester Stallone than they would use it for human purposes.

The capitalist's interest in profit is an exception in society, and what benefits the capitalist often does harm to society. If the capitalist class is to dictate the economic and political form of society, if the executive of the modern state is going to be, as the communist manifesto states, nothing but a committee for handling the common affairs of the whole bourgeoisie, then the goal of society will continue to be the misery of its citizens. The narrow economic progress of the years 1983-1995, in which only 5% of individual incomes increased, will continue to be defined as prosperous years. Globalization will continue to be heralded as a wonderful success even though in 1998 the poorest fifth of the world consumed 1.3 percent of its products. If we shared the narrow imagination of Margaret Thatcher and joined her in declaring, "there is no alternative", then we should just accustom ourselves to the world that we inhabit. We would declare, with Francis Fukuyama that this is "the end of history", and the question of socialism would be no more.

There is reason to believe that history has not actually ended, that Thatcher's admonition is actually a propaganda slogan that wishes to be a self-fulfilling prophesy, and that Fukuyama's declaration of the end of history is just as ignorant as that of Edward Bernstein's similar declaration of a century ago. There is a realistic alternative to the bourgeois corruption of the political system which can be found in the historical record. The Paris commune began on March 26th 1871, with a bloodless uprising of workers.

The majority of the commune's directors, elected by universal suffrage, were socialists. All of the officials in the commune were elected directly, subject to recall at a moment's notice. The judges and police officials were also elected by the people. No commune official was to earn any more than the average worker's wage, eliminating political careerism in government. The costly and officious standing army was abolished, There was to be no separation between the army and the people, but the former was to embrace the latter. The national guard, composed of all Parisians capable of bearing arms, replaced the standing army.

The first measure of the commune was the abolition of the notoriously reactionary morality police, who had harassed prostitutes, and repressed dissidents and homosexuals. The commune recognized the right of dissent and freedom of lifestyle. While the commune was opposed to prostitution as a form of exploitation and degradation, it attempted to root out the social evils which engendered the practice rather than criminalize prostitutes. As a result of this, and other enlightened policies, the prostitutes were among the most militant supporters of the commune.

The commune was anti-chauvinist. Foreigners were elected to the government, as the Parisians declared the flag of the commune to be the "flag of the world republic." The commune declared that the Vendome Column, a monument erected from the smelted iron of weapons captured in the Napoleonic wars, be destroyed on the grounds that it was a symbol of chauvinism, and its existence constituted "an incitement to national hatred."

The commune was a truly proletarian government. Through the commune, night work at bakeries was abolished, and inoperative factories were ordered to be converted into worker's co-operatives. The system of work permits was abolished, because rascally officials had demanded a surcharge for their issuance.

Workers throughout Europe stood with the commune in solidaric militancy. Demonstrations were staged in Germany in support of first ever worker's government. Six years after the commune was brutally crushed by the the Bonapartist Gallifet, with 30,000 unarmed communards slaughtered in a seven day frenzy of revenge, the commune inspired several general strikes throughout America. Many of the militant workers in those struggles hoped that 1877 would mark the second coming of the Paris commune. There is good reason to point out the Paris commune as an example of what workers can achieve when organized as a class. Engels, arguing over the question of the revolutionary state, said "do you want to know what this dictatorship looks like? Look at the Paris Commune. That was the dictatorship of the proletariat." The Paris commune was a stable political body of the working class; models like is should be on the agenda of anyone working for genuine social change.

While the Paris commune is an inspiration for political change, the Spanish Revolution is an inspiration for economic change. In the Spanish revolution, the beginning and end of which roughly coincides with the Spanish civil war, (1936-39) workers and peasants expropriated capitalists and landowners and ran things for themselves. Augustine Souchy explains the beginning of the movement, as it happened in Barcelona, and repeated itself in all of Catalonia:

With the repulse of the fascist assault on the 19th of July and the days following, the big commercial and industrial properties were abandoned by their owners. The big executives of the railroads, urban transport, the big metal and machinery plants, the textile industry, etc., disappeared. The revolutionary general strike called by the workers as a measure against the fascist putsch paralyzed the economic life of Barcelona and suburbs. [souchy 78]

The workers initiative proved more effective than was planned. Francisco Franco's troops, and the center-right Capitalists had been repulsed. The city was won. It was now incumbent upon the brave workers of the Confederacion National Trabajadores, the syndicalist trade union, to organize for the defense of the city while operating the industry which the capitalists abandoned. The C.N.T., wherever it had control, organized the economy on many levels. The achievements of the workers are inspiring, and, even if one judges them without reference to the miserable circumstance of war and poor finance, one must conclude that the organizational brilliance of a solidaric group of militant workers can be a mighty power. The Catalonian metal workers built the industry from scratch. At the twilight of the civil war, 80,000 metal workers were supplying the anti-fascist fighters with armaments. At the start of the civil war, the largest metal works factory employed 1,100 workers and made automobiles. A few days after July 19th, the newly collectivized factory was converted to make armored cars, hand grenades, ambulances, and machine gun carriages. In two years, four hundred metal factories were built in Barcelona.

The Anarchist writer and former hobo Sam Dolgoff defines worker's self-management as the 'very process by which the workers themselves overthrow their managers and take on their own management and the management of production in their workplace. Self management means the organization of all workers in a workplace into a workers' council of factory committee (or agricultural collective), which makes all the decisions formerly made by the owners and managers.' The railroads, the telephones, the gas, water, electricity, and even hairdressing salons were collectivized under worker's control in Catalonia. In an intense challenge to the workers resolve, half of Catalonia's telephone lines were destroyed by hand grenades in the civil war. The workers, acting on their own initiative, restored all of the lines within three days time.

The Spanish revolution illuminates for us a great chapter in worker's self management. It also exposes the lie that the only alternative to capitalism is the Stalinist bureaucracy. In a political environment that is narrowed by lies about the glorious, illimitable, and unstoppable development of capitalism, freedom is impossible. The citizen's of the world's formal democracies are unaware that another world is possible, and so are not free to choose it. The truism that a choice which is made without knowledge of other options is not free because it is prejudiced by ignorance is a vile reality, which can only be broken by reclaiming history, and screaming its truths from a rooftop.

Our programme must be: the reform of consciousness not through dogmas, but by analyzing mystical consciousness obscure to itself, whether it appear in religious or political form. It will then become plain that the world has long since dreamed of something of which it needs only to become conscious for it to possess it in reality. It will then become plain that our task is not to draw a sharp mental line between the thought of the past and future, but to complete the thought of the past. Lastly, it will become plain that mankind will not begin any new work, but will consciously bring about the completion of its old work. [209]

What Marx means here is not that revolution is not always a new idea, but rather that it gives real substance to old ideas. By showing the present cleavage between the theory of freedom, and the practice of society which is ideologically enslaved like so many of Wittgenstein's flies in a bottle. To restore freedom, it is only necessary to show the flies that the world they see before them exists outside of the bottle. Once that is done, they can choose to remain within the bottle, or to break out. Either decision they take will be free.

Jordan Bloch, 19, is an activist and a student at Santa Monica College in Los Angeles. He is a member of the SMC Progressive Alliance, as well as the Los Angeles Strikers Solidarity Organization. He can be reached at

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