While thinking about the invasion of Ukraine by Russia, I realised that this was in part a world war by proxy, in that it was one of totalitarianism against democracy, and it made me realise it was one of two world wars going on at present. Both have enormous consequences should the wrong side win. In the previous essay, explained why I believe it is imperative that Russia loses the Ukraine war1.
It is also imperative that democracy wins the second war. This second war is between people and those with huge amounts of money (i.e. the wealthy and corporations). Money does not actually exist beyond its use as a replacement for barter. It is a way of standardising the value of something when one wants to exchange one item for another2. The problems began when some people thought its accumulation was something to be desired, beyond the ability to use it for anything worthwhile rather than to simply accumulate more money. Some people will go to any lengths to accumulate more of the stuff.
Karl Marx proposed that the motivating force of capitalism is in the exploitation of labour, whose work is the ultimate source of surplus value (pre-tax profit). The owner of the means of production was able to claim the right to this surplus value because they were legally protected by property rights and the legally established distribution of shares which at the time were distributed only to company owners and their shareholders3.
Marx viewed production relations as central, with money and credit being viewed as associated with exchange rather than production. However, it is agreed that capital accumulation is a central process of capitalism. This drive to accumulate sets capitalism apart from earlier modes of production, and underlies its expansionism. It also explains the continual tendency to erode other relations of production within capitalism. Historically capitalism developed as a money economy, and increasingly elaborate credit relations accompanied the advance of capitalism from its early days. Many analysts view credit as essentially a convenience that develops because it facilitates capitalist exchange or permits faster accumulation of money4.
Scottish philosopher and economist, Adam Smith, said “Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.”5
Smith believed that when an individual pursues his self-interest under conditions of justice, he unintentionally promotes the good of society. Self-interested competition in the free market, he argued, would tend to benefit society as a whole by keeping prices low, while still building in an incentive for a wide variety of goods and services. Nevertheless, he was wary of businessmen and warned of their “conspiracy against the public or in some other contrivance to raise prices”. Smith continually warned of the collusive nature of business interests, which may form cabals or monopolies, fixing the highest price “which can be squeezed out of the buyers”6.
More importantly, Smith warned that a business-dominated political system would allow a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. He stated that the interest of manufacturers and merchants “in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public”. Smith’s chief worry seemed to be when business is given special protections or privileges from government7.
Smith was right to be worried. Business has been given special protections and privileges by governments for decades. This is where we are now, but business always wants more. We are heading towards a neofeudalism where corporations influence the government to an extent that most people are scrambling to be able to buy food and put a roof over their head, while the wealthy and those in big business live a lavish lifestyle supported by handouts from governments by way of tax cuts, privatisation, consultancies and subsidies.
I cannot remember where I heard it, but it seems appropriate in today’s world. “When a politician talks about the economy, what they are really referring to is ‘rich people’s yacht money’, rather than the economy.”