Many of us, even though we are not in the top 0.1%, can count many blessings from capitalism and cheap energy:
- Longer lives and fewer childhood mortalities.
- More leisure time.
- Advancements in education, entertainment, health care and home life.
- Increased mobility and reduction of travel time.
- Modern housing amenities such as electricity and plumbing.
- Increased food production.
For our own good, we should still question the following interpretation:
The US has led an unprecedented time of progress and opportunity largely because we encourage innovation through competition and the free market. In order to continue, we need to prevent government interference, including excessive regulation and policies that redistribute income or wealth. Survival of the fittest ensures that the best win, and is the surest way for continued progress.
Two books that challenge that story are How the World Really Works by Vaclav Smil, and Chokepoint Capitalism by Rebecca Giblin and Cory Doctorow.
How the World Really Works explores the influence of cheap energy, and especially oil, in how we live and how nations interact. For example, for virtually the entire history of mankind, a farmer would produce enough food to feed about 1.3 people, and about 90% of the population was involved in farming. Today, 2 percent of the population work on farms. Similar transformations have taken place with transportation, communications, technology, and every other aspect of our lives.
It wasn’t necessarily the US political system, or capitalism, that has brought about progress and wealth, it’s much more likely due to our extraction of energy resources. These were made possible by cheap petroleum. Those resources are not found in Western Europe, China, or Japan, and yet those nations’ economies need access to cheap energy.
Smil points out and describes quite a few ramifications:
- Until we understand the full effects of cheap energy on all aspects of our lives and economies, we cannot properly take actions to promote sustainability or the regeneration of natural resources. Once we do, we can start weighing the tradeoffs we will all have to make.
- Access to petroleum and control of energy resources can be traced to almost every international political battle and armed conflict over the last 100 years.
- Unfortunately, we can’t just stop our dependence on fossil energy sources in a 10, 20, or even 30-year timeframe and also support the existence of almost 8 billion people on the planet.
In Chokepoint Capitalism, Giblin and Doctorow refute the perception that the capitalism practiced in the US is based on competition, an ordered market, and limited government involvement. The contend that large organizations more often thrive because of government protected monopolies, and that the results is both a tilted playing field and that any benefits of growth or productivity accrue solely to the top 0.1%:
Concentrated industries generate big profits for their investors, who, seeing how well their anticompetitive flywheels work, go looking for other industries to which they can apply the same extractive tactics. Its primary beneficiaries are an infinitesimal coterie of the ultra-rich.
It’s supremely difficult to maintain the free conditions that are central to capitalism, since markets have such a strong natural tendency toward concentration, extraction, and rent-seeking.
Our exploration shows corporations have strategically achieved the conditions they need to take control of creative markets and use them to shake down creators: anticircumvention laws, vertical and horizontal integration, high costs of market entry, captured regulators, opaque accounting, and the power to aggregate copyrights on an industrial scale and wield them against the very people they are ostensibly meant to protect. Combined with antitrust’s blinkered focus on consumer welfare and the neoliberal economic dogma that a company’s only purpose is to increase profits and maximize shareholder value, the outcome is inevitable: ever bigger corporations squeezing out an ever bigger share. That’s why the choice between Big Tech and Big Content is no choice at all. Whomever creators throw their lot in with, they’ll get essentially the same deal: the least the industry can get away with, and the promise it will be ratcheted.
Before we accept any explanation of how extraordinary society has made our lives and why we need to support the status quo, or the opposite claims that we are on the verge of an apocalypse and global anomie, maybe we should take some time expanding our mindsets; maybe we should spend some time on books like these to educate ourselves, and then find others who are willing to help right our societies and organizations to better serve all of us.
The title of this post was borrowed from the Panglossian philosophy caricatured in Camus’s short story Candide. Perhaps that should also be required reading.