No, capitalism isn’t making us all richer and richer
If you frequent mainstream right-libertarian publications on anything like a regular basis, you’ve probably seen more than one of those breathless articles about how capitalism is making the ordinary poor person richer than a medieval king.
For example Calvin Beisner: “No matter how rich you might have been” 150 years ago, “You could not have enjoyed air conditioning or iced drinks during a hot summer…. You could not have taken or viewed photographs, listened to recorded music, or viewed… motion pictures.” (“Material Progress Over the Past Millennium,” FEE, Nov. 1, 1999). I’ve long been infuriated by the way such puff pieces ignore both the inflation in the cost of necessities like housing, and — perhaps more important — the increasing precarity of a growing portion of the working class. Finally someone in the mainstream press — the Washington Post, no less — is pointing out the same thing (Christopher Ingraham, “The stuff we really need is getting expensive. Other stuff is getting cheaper,” Aug. 17).Yes, computers, smart phones and big screen TVs are getting a lot cheaper. But a lot of much more fundamental stuff is not. “Since 1996, the prices of food and housing have increased by close to 60 percent, faster than the pace of inflation. Costs of health care and child care have more than doubled. The prices of textbooks and higher education nearly tripled. Over the past several decades they’ve all been increasing in price at several times the rate of inflation.”
And for a rapidly growing segment of the working class, job security is becoming a thing of the past. The fastest growing sectors of the job market are precarious jobs with “independent contractor” status where there’s little assurance of being employed next year, next month or even next week. And precarity overlaps with financial fragility. As Neal Gabler points out at the Atlantic (May 2016), “Many Middle-Class Americans are Living Paycheck to Paycheck.” Most Americans lack the savings to deal with a car repair or other unexpected expense of even a few hundred dollars.
Precarity includes not just short-term uncertainty about even minimal basic income needs, but growing indebtedness as a way of life. Stagnant working class incomes have worsened capitalism’s already troubling crisis tendencies towards underconsumption and idle capacity, and rising consumer debt has been the system’s way of generating demand.
The things which are most essential to life and basic material security also happen to be the things which capitalists, in alliance with the state, have been most successful at enclosing with artificial property rights and extracting rents from. The landlord monopoly — by which vacant land is engrossed and enclosed and then either held out of use altogether, or opened to use only in exchange for tribute — is the obvious example.
But the healthcare industry is riddled with things like drug patents, licensing monopolies that restrict the number of practitioners, and corporate hospital chains protected by all kinds of government entry barriers and accreditation rackets that drive up overhead with enormously wasteful and irrational capital spending outlays and bloated senior management salaries. The health insurance industry is a racket in its own right. But the main source of cost inflation is on the provision of service side, with all the interlocking monopolies and cartels that make any procedure in America cost several times what it does elsewhere in the world.
College education has become a necessity mainly because of cooperative efforts by the state, employers and the higher education industry itself to inflate credentialing requirements for employment. And given this artificially created necessity, and the willingness of the student loan industry to ensnare new victims, higher education takes advantage of the ever higher tributes flowing in from its captive clientele to pour billions into wasteful building projects and grow the numbers and salaries of administrators at several times those of faculty and support staff. Students, meanwhile, incur a lifetime of debt peonage to pay this inflated tuition, with the likelihood of years of unpaid internships before they can finally get into a bottom-rung paid white collar position.
Even in the case of stuff that really is getting cheaper, of course, the falling price doesn’t dispense with questions of justice. Most of the price of those electronic goods comes not from the actual labor and material inputs required to make them, but from the embedded rents on patent and copyright monopolies. And Internet access on those computers comes through data pipelines controlled by robber baron telecom monopolies that operate fist-in-glove with the state. So the stuff is becoming cheaper — but not nearly as cheap as it should be. And the difference is going into the pockets of parasitic rentiers.
No, Henry VIII could never have obtained an air conditioner or computer. But Henry VIII didn’t spend half his month’s income on rent, or live a single paycheck away from eviction.
It’s time for libertarians to stop putting a positive spin on how wonderful things are under capitalists’ and landlords’ unholy alliance with the state, and start attacking that collusive power relationship. It’s time to abolish all monopolies and artificial property rights that make the necessities of life expensive, and turn the productivity of our collective intellect into a source of rents.