Capitalism Works, Just Not For Everyone and Not All the Time

By Andrew Ancheta

Jeremiah Reedy’s editorial last week argued in defense of capitalism, saying that capitalism “stimulates creativity and work” and encourages philanthropy. I wish to explain briefly why I am skeptical of the universal benefits of capitalism.
It would be wrong to say that capitalism has not been a positive force. Marx wasn’t just being sarcastic when he applauded the triumphs of the market; the profit-drive creates wonderful things like cars and iPods and electric vibrators. And philanthropists. But it has shortcomings too: with its vast concentrations of wealth, capitalism has created vast concentrations of poverty.
The question is not whether charity is made more possible by capitalism, but why it is necessary at all. In spite of the cars and computers and riches created by capitalism, millions of Americans continue to suffer from hunger and disease. Last winter our poorest neighborhoods were warmed by fuel provided by Venezuela’s socialist government. So much for capitalist philanthropy.

Two summers ago I had the rare opportunity to travel to Cuba, and I met there many union officials and party functionaries and workers who described their lives under socialism. In spite of the inexcusable abuses of the governing authorities, the majority of Cubans seem prefer their system of collective labor to capitalist ownership.
Cuba was prosperous under capitalism—for the rich. Havana was full of cabarets and casinos and brothels for the benefit of tourists and the plantation aristocracy. “Despotism tempered by Epigrams,” as Carlyle said of the French nobility: as if the elegance and culture of high society made the hunger and filth endured by the lower classes more bearable.
The plight of the Cuban economy during the 1990’s—the eighteen-hour blackouts and toilet-paper shortages and rationing—is excellently described in Isaac Saney’s book A Revolution in Motion. When gas was so scarce that food deliveries could not be counted on, ordinary Cubans came together to cultivate their empty lots and yards and shared the produce. They didn’t need the profit-drive or the government to compel them; they cooperated in the spirit of mutual aid and compassion that is at the root of all kindness.

In 1991 the Communist party prepared a far-reaching platform of Chinese-style market reforms.

After fierce debate the right-wingers consented to let the citizens debate it. Across the island workers assembled in vast congresses to decide whether socialism would continue to rule in their country, and their answer was resounding. No reforms, they said; Cuba will never again be the brothel of Western capitalism, with its workers reduced to starving misery. The platform was rejected, and a much more modest one—allowing for small family enterprises and minor privatization, but preserving the major advances of collective management—was approved in its place.

Perhaps as a result of their decision ordinary Cubans are unable to reap the benefits accorded by capitalism. At the cost of listening to Fidel’s boring speeches and eating gristly meat, they have spared their country the worst excesses of profiteering and greed. “Twenty million children sleep on the streets tonight,” one of them told me, “and not one of them lives in Cuba.”
The most threatening characteristic of capitalism is its tendency to conflict. As capital expands the profit-drive compels us to look abroad for new resources and labor and markets; war follows from capitalism as inevitably as blood from a wound. The guns had not ceased thundering when the Iraqi economy was privatized by decree and sold to the highest bidder. Our options, said Rosa Luxemburg, are no longer socialism and capitalism, but socialism and barbarism.