This post is part of a series about the alleged return of feudalism with the advent of Big Tech.

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What is capitalism? What words, ideas and/or concepts would you generally associate with it?

Some might say it is all about “technological development” driven by the “desire to be rich”. Others might say something like “greed” and the “naked pursuit of power”.

But greed, lust for power and even technological development have been around for much longer than capitalism.

The pressure to reduce costs#

Instead, what is distinctive about capitalism is the systemic pressure on producers to reduce costs¹ in order to not be kicked out of the market. Such cost reductions can be achieved in several ways:

1. technological innovation (doing things smartly)
2. wage suppression (find the cheapest workers, pay them as little as possible, undermine their abiltity to collectively demand more)
3. exploitation of nature (destroy one place by taking more than it can sustainably yield and move on to the next place)
4. and/or building stronger and more violent (international) cartels (make sure that people depend on you, and minize your dependence on people)

Whether acting alone, or in state-corporate alliances, those capitalists who fail to minimize costs, simply disappear.

The emergence of a market#

The reason for this systemic pressure lies in the fact that - under capitalism - people have money to spend in an open market.

This itself is largely the result of the emergence of wage labour.

Before capitalism (under feudalism), the elites would …

1. let people use their property (e.g. land) to produce for themselves,
2. in return for some of this produce (and/or e.g. some months of military service)

Under capitalism, the elites …

1. get workers to work their property (land, machines)
2. keep everything that is produced
3. sell it in the open market
4. use some of the monetary income to compensate the workers (who then use that money in the open market to buy what they need to live)
5. use some of the money to invest in the stuff that drives down prices (see the list above)
6. and use the rest to purchase their own consumption in the open market.

So under feudalism, people would produce their own stuff, and “pay” the elites in kind for the right to use their land. As a result, people did not need the market to live, nor did they have the money to buy anything in it. This in turn meant that the pressure to reduce costs (to not be kicked out of the market) was barely there.

Under capitalism, all these exchanges happen through the market: capitalists buy labour and inputs in an open market, and can only do so as long as they can sell (monetize) their produce in that same market. Workers are selling their labour for money in a labour market, and use the wage they receive to buy what they need to live. Suddenly everyone is competing with everyone.

The spiral of cost reduction#

Capitalists are forced to minimize costs in order to not lose market share, and one way to do so is to drive down wages. Because workers’ wages are driven down, they are compelled to search for the cheapest products, which itself contributes to the pressure on capitalists to lower costs (to not lose customers).

If this spiral would simply reduce costs, and allow us to have the same living standard with a smaller resource footprint, the way ecomondernists would like us to believe, capitalism would be amazing.

The unfortunate systemic results of capitalism#

The unfortunate truth is that the cost reductions are not only the result of technological innovation, but come with the exploitation of nature, the spread of violent international cartels, and, as mentioned, the suppression of wages. And to the extent that the cost reductions are the product of technological innovation, the productivity increase does not lead to lower resource use, but higher (production and) consumption, especially by those who need it the least.

Capitalism brings enormous cost reductions, but it compells us to wage war, it requires us to eat up the future of our (and others’) children, and it prevents us from realizing (both as in “making sure” and “recognizing”) that there is more than enough for everyone.

The mother of all collective action problems#

In a way, we have “fallen” into capitalism as a species. Regardless of how “freely” we adopted this new mode of production, once the ball started rolling, it kept rolling faster and faster, pulling all of us along. And the further we rolled down the hill, the harder it became to climb out of it.

This is because we are facing a collective action problem of planetary proportions. As is true for all collective action problems, it is very hard for the individual actor - whether workers, capitalists or states - to escape it individually. Those who individually decide to step out of it - who refuse to participate in the destructive rat race - will be displaced and overrun by those who do not.

Can you then really blame the individual for their unwillingness to do so? Maybe not. But can you then blame the individual for not trying to find (and contribute to) a collective way out? Maybe yes.

Who will organize our escape?#

It is easy to be sceptical about our ability to design and maintain the kind of global coordination that is necessary to prevent an overall tragedy. Still, I believe we have a responsibility to start taking stock from where and how such a collective effort is most likely to emerge.

We need to come up with as many scenarios as we can, but one of them could sound like this.

Within every group (whether they are made of people or states), “those who have a lot” are more likely to get their way without collective action. This is where individualism thrives. This part of society is unlikely to lead us away from collective tragedy.

Instead, “those who have a little” depend on their numbers and their ability to organize solidarity in the face of divisive manipulation.

On top of that, “those who have a little” have a lot to gain from the kind of collective systemic change that is necessary to prevent planetary collapse, while they simultaneously have a lot to lose if this planetary collapse does materialize.

To put it differently: those who have benefited the least from capitalism are the most likely to benefit from attempts to step out of it. From small initiatives of mutual aid, to more elaborate solidarity networks: once freed of their dependence on the machines of the capitalists, they might find out that by keeping the fruits of their labour to themselves and within the community (rather than handing it over to capitalists), and by adjusting their production and consumption to the ecological carrying capacity of their own land, they end up with healthier lives in a healthier world. And if we are lucky, the success will be as viral as capitalism once was.

Against some odds#

Of course, there are plenty of forces and logics working against this scenario. To just mention two: when you don’t have a lot, you need to be very strong to not break ranks when “those who have a lot” try to coopt you with (cheap) bribes (e.g. based on your gender, race, nationality). And the convictions that are necessary for such strength depend on good education and clear information - two things that, as we are currently seeing - can easily be undermined.

Yet, however unlikely and difficult it might be, there are good reasons to believe that our escape from capitalism will be organized by those who have cultivated (or have been forced to cultivate) the kind of values that are necessary for large-scale organization and solidarity.