An ‘anarcho-capitalist’ explains (2024)

From the March 2024 issue of the Socialist Standard

Last November voters in Argentina elected as President, Javier Milei, who must have styled himself at one time an ‘anarcho-capitalist’ since that’s what the media keep calling him. In January he was invited to the gathering of global elites in Davos in Switzerland and gave a speech in which he expounded his views. He had some harsh things to say about the state, seeing it, as individualist anarchists do, as the negation of ‘freedom’:

‘The state is financed through tax and taxes are collected coercively. . . This means that the state is financed through coercion and that the higher the tax burden, the higher the coercion and the lower the freedom’ (tinyurl.com/29vuvjwr).

Strict anarcho-capitalists want to abolish the state completely and transfer all its functions, including the judiciary and the armed forces, to profit-seeking private enterprises. Milei doesn’t go that far as he sees a very limited role for the state (to protect and enforce private property rights and commercial contracts) and so is technically what has been called a ‘minarchist’.

Defining his ‘libertarianism’ he said:

‘Its fundamental institutions are private property, markets free from state intervention, free competition, and the division of labour and social cooperation, in which success is achieved only by serving others with goods of better quality or at a better price. In other words, capitalist successful business people are social benefactors who, far from appropriating the wealth of others, contribute to the general well-being. Ultimately, a successful entrepreneur is a hero.’

Adding ‘and this is the model that we are advocating for the Argentina of the future’. So, it looks as if he is going to try to introduce ‘minarchy’ there. The result could well be some sort of ‘anarchy’.

Capitalist heroes?

It is a measure of the desperation of workers in Argentina that they were prepared to vote into the top office a person who calls capitalists heroes.

Are successful capitalists really heroes? To have a chance to be successful you first have to obtain money to invest in producing some good or providing some service. You can get this in various ways — inherit it, borrow it, even acquire it illegally — but you have to get it. Having identified what you think might be a profitable market you use the money to rent premises, buy machinery and materials, and hire workers. You put the workers to work at producing your product which you hope to sell at a price that covers these expenses plus a mark-up for profit. If your hope is realised you end up with more money than you started with. You have made a profit.

But what is the source of this profit? Since the only way that wealth can be produced is by applying human labour to materials that originally came from nature (usually after having been fashioned and refashioned many times) the source can only be the work of those who produced what capitalists sell. It’s the difference between the value of what workers add to the materials and what they are paid as wages. The source of profits is the unpaid labour of workers. Contrary to Milei’s assertion, capitalists do appropriate wealth produced by others. That’s not very heroic.

It is true that while some capitalists succeed others fail, and that how well you know your market or can identify a new market can affect how much profit you make and whether you succeed or fail. But this doesn’t increase the amount of wealth that has been produced. It is competition between capitalists to get a share of that part of new wealth produced by the working class over and above what it costs to maintain them. ‘Capitalist successful business people’ are those who do best in this competition at the expense of their capitalist rivals.

All on their own?

Milei argued that it is ‘free trade’, ‘free enterprise’ capitalism that has been responsible for the immense increase in both productive capacity and the amount produced since 1800.

It is a bold claim to say that this was achieved by private enterprises acting all on their own in pursuit of profits without any state intervention; in fact in spite of such intervention. We hold no brief for those pro-capitalists who favour state intervention, but we must point out that the state provides a range of key services that help private enterprises to operate and succeed. For instance, by arranging for a supply of literate and educated workers, or a health service to patch up workers so they can go back to work as quickly as possible, or payments to workers who are temporarily unemployed during a slump so that their ability to work doesn’t deteriorate for when they are needed in the next boom.

Milei denounced this state provision of services for capitalist enterprises as a whole as ‘collectivism’ (and also, as might be expected, as ‘socialism’):

‘The problem is that social justice is not just, and it doesn’t contribute to general well-being. Quite on the contrary, it’s an intrinsically unfair idea because it’s violent. It’s unjust because the state is financed through tax and taxes are collected coercively.’

In his view, taxing capitalist enterprises to pay for such collective services amounts to stealing some of their profits by force:

‘[T]he market is a discovery process in which the capitalists will find the right path as they move forward. But if the state punishes capitalists when they’re successful and gets in the way of the discovery process, they will destroy their incentives, and the consequence is that they will produce less.’

There is an element of truth in this in that, if the state goes too far in this direction — as reformist politicians want as a way of trying to improve conditions for workers under capitalism — this will have the consequence both of undermining the quest for profit that drives the capitalist economy and of rendering capitalist enterprises uncompetitive compared with their rivals from other states. It’s why all reformist governments fail and are doomed to fail. But if a state which did not provide these services for its capitalists and left their provision to profit-seeking private enterprises — as ‘anarcho-capitalists’ and ‘minarchists’ want — then this too would undermine the competitiveness of its capitalists.

It’s the job of governments, as the executive committee of their capitalist class, to get the balance right. In any event, no state has ever not provided such services, so it cannot be claimed that capitalist development since 1800 has been due to private capitalist enterprises alone. In fact, capitalism has never existed without the state. The state helped it to come into being and has helped maintain it ever since.

Can the market fail?

Milei also took a pot shot at neo-classical economic theory which, he said, ‘designs a set of instruments that, unwillingly or without meaning to, end up serving intervention by the state, socialism and social degradation’. He had in mind in particular its theory that the state should intervene to correct ‘market failures’.

According to him, market failures are impossible:

‘The market is a mechanism for social cooperation, where you voluntarily exchange ownership rights. Therefore based on this definition, talking about a market failure is an oxymoron. There are no market failures. If transactions are voluntary, the only context in which there can be market failure is if there is coercion and the only one that is able to coerce generally is the state, which holds a monopoly on violence.’

Notable ‘market failures’ that he rejected as such were the emission of too much CO2 into the atmosphere and the emergence of monopolies. He says they are not examples of the market failing. Okay, let’s accept this and see them as the result of ‘free market capitalism’ working normally. That rather weakens his case for ‘free market’ capitalism. These are indeed results of how the capitalist market economy does work and why its operation prevents states from dealing effectively with problems such as climate change. In any event, state intervention to try to correct what are perceived as market failures has nothing to do with socialism.

Milei began his address by saying that he was there to tell his audience, made up of the world’s leading capitalists and political rulers, that ‘the Western world is in danger’. This danger, he told them, came from continuing to practise ‘collectivism’. At the end he remarked: ‘I know, to many it may sound ridiculous to suggest that the West has turned to socialism’. He was right. It does sound ridiculous but that’s because it is ridiculous.

Adam Buick

The Party of Business (2024)

"My Red Flag is in the wash."

From the March 2024 issue of the Socialist Standard

Fifty years ago on 28 February 1974, there was a general election. The Labour Party’s election manifesto included a pledge to:

‘Bring about a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families’.

During the election campaign, Denis Healey made his famous promise to squeeze (some of) the rich until the pips squeaked. It was only to be property speculators not all the rich but he did say that a future Labour government would increase income tax on those with the highest incomes.

Labour won that election and a second one in October the same year.

Alongside nationalisation, the redistribution of wealth from the rich to the working class was the Labour Party’s claimed path to a more equal society. That was how reformism was going to gradually bring about ‘socialism’.

The Labour Party was originally set up as the parliamentary wing of the trade union movement. Hence its name. It was supposed to be the party of labour, the party that was to press for legislation to improve the conditions of workers. In 1918 it did adopt a constitution which proclaimed full-scale nationalisation, which it called socialism (but was actually state capitalism) as its long-term aim, but in practice it sought working- class support on the basis of promising to improve things for workers within the capitalist system.

When in office the Labour Party has always had to govern in the interest of business. That capitalism is an economic system that runs on profits made by businesses is an economic reality which all governments have to recognise on pain of causing an economic slowdown or even downturn. Whatever they might have promised so as to get elected or might have wanted, all Labour governments ended up recognising this and accepting the need for profits to be allowed to be made. Labour MP Harold (later Lord) Lever put it very clearly shortly after Labour won the 1966 General Election in terms as relevant today as they were then:

‘Labour’s economic plans are not in any way geared to nationalisation; they are directed towards increased production on the basis of the continued existence of a large private sector. Within the terms of a profit system it is not possible, in the long run, to achieve sustained increases in output without an adequate flow of profit to promote and finance them. The Labour leadership knows as well as any businessman that an engine which runs on profit cannot be made to move faster without extra fuel. So, though profits may be squeezed temporarily by taxation and Government price policy, they must and will, over a longer period, increase significantly even if not proportionately to increased production’ (Observer, 3 April 1966).

Labour openly embraces capitalism

In 1995 Tony Blair got the party, in opposition since 1979, to drop Clause 4 of its constitution with its socialist-sounding wording. In 1998, Peter Mandelson, a cabinet minister in the Labour government that had come into office the previous year, famously stated the government was ‘intensely relaxed about people getting filthy rich as long as they pay their taxes’.

This was the ‘New Labour’ that replaced Old Reformist Labour. Starmer is in the same tradition, only he has gone further by declaring Labour to be ‘the Party of Business’. Not only that, he accepts that this involves pursuing, when in office, a policy of ‘fiscal conservatism’ (tinyurl.com/58xynpda):

‘It was “a big mistake” for the left to equate spending money with radicalism as he insisted that fiscal discipline was fundamental to winning power’ (Times, 19 July).

He told last year’s Labour Conference that a Labour government would not be ‘a cheque-book state’ and in a speech last December declared that ‘anyone who expects an incoming Labour government to quickly turn on the spending taps is going to be disappointed’ (tinyurl.com/bddbhuxu ).

Starmer and his would-be Chancellor Rachel Reeves began 2024, the year they both hope to move into Downing Street, by stepping up their appeal to business leaders. Reeves went to Davos to meet the world’s political and business elite at their annual jamboree in Switzerland. She said she was going there to try to convince them that Labour not the Tories ‘are now the pro-business party’ (Times, 18 January).

A couple of weeks later the Labour Party organised its own meeting for business leaders, sponsored by HSBC. The headlines in the business press reporting what went on tell it all:

‘Labour Is The Party Of Business,’ UK’s Starmer Tells Corporate Bigwigs (Barrons, the American business weekly).

Labour is now ‘pro-business’, vows Rachel Reeves (Financial Times).

Reeves unambiguously committed the Labour Party to supporting capitalism:

‘This Labour Party sees profit not as something to be disdained but as a mark of business succeeding’.

‘Be in no doubt, we will campaign as a pro-business party — and we will govern as a pro-business party’ (tinyurl.com/bdubeuak).

So, what has the New Business Party been offering Business?

‘We will cap the headline rate of corporation tax at its current rate of 25 per cent for the next parliament.’

‘The shadow chancellor has told the BBC Labour would not reinstate a bankers’ bonus cap that was scrapped last year by the Conservative government’ (tinyurl.com/dsymw2zn).

‘Labour rules out wealth tax if party wins next election. Ms Reeves confirmed Labour would not target expensive houses, increase capital gains tax or put up the top rate of income tax’ (tinyurl.com/eyftrjdu).

‘Party amends plan to bolster protections for gig economy as it boasts of ‘pro-business’ credentials’ (tinyurl.com/ypxfaz48).

In her speech to the business leaders, Reeves declared that, whatever happens, ‘I will not waiver from iron-clad fiscal rules’. Labour is banking on being able to conjure up growth, but what if this doesn’t happen, as it might well not as governments don’t have the power to bring about growth?

No or slow growth would mean less tax revenue. Under its ‘iron-clad’ rules and given its promise not to increase corporation or other taxes on business, the Labour government would have to cut back on its spending and impose austerity, putting the defence of profits and profit-making first, before social spending and before public sector wages. It would, as Reeves put it, ‘govern as a pro-business party’. All governments always end up having to do this anyway but never has a party announced so clearly in advance that this is what they will do.

Adam Buick

Cooking the Books: Vice’s homage to virtue (2005)

The Cooking The Books column from the March 2005 issue of the Socialist Standard

At their annual “World Economic Forum” jamboree in the Swiss ski resort of Davos in the last week of January, the world’s political and business leaders vied with each other to strike an “ethical” pose. It was, commented one newspaper, a case of ethics with everything.

There is even a magazine called the Ethical Corporation. At the time of the Tsunami its Asia-Pacific editor, James Rose, was active in the Australian press. “Put profits aside in the rebuilding” read the headline of one of his articles, “Shareholders should let companies assist in the post-tsunami reconstruction” (Australian, 4 January). “Companies must look beyond the bottom line” read another, “Corporate leaders see only profits as important. They must change” (Melbourne Age, 7 January).

Shareholders in construction companies would be only too willing to let them assist in the rebuilding. In fact, shares in them went up in anticipation of juicy reconstruction contracts. But this was not what Rose had in mind. Supply lines for aid, he wrote, “could be usefully shortened if corporations went in and did more of the work themselves, gratis, under the direction of the charity groups on the ground”, and:

  “What we need here is for corporations to throw off the cloak of self-interest. The best thing they could do is to approach the situation as it now stands as if it were a legitimate business opportunity, apart from one important factor: they will expect no financial or brand rewards”.

It’s a nice thought. The skills and the techniques are there, there are people in need, so why not bring the two together without any thought of profit? But it’s not going to happen, because that’s not the way capitalism works or could ever work.

Capitalism is a profit-making system and capitalist corporations have no choice but to put profits first. Not because the top executives are selfish or greedy or insensitive but because that’s the economic logic of the system. Corporate executives are merely what Marx once called “personifications of capital” and capitalism is an impersonal economic mechanism of the accumulation of capital out of profits which those in charge have to apply irrespective of their personal opinions or preferences.

Rose is aware of what he is up against as he wrote in the same issue of The Australian:

  “What is a corporation? On one level, it’s a pure money-making machine. There is solid opinion to say that’s all it can be. Even if a corporation wants to be a paragon of the New Age, it is constrained by the fiduciary obligations to its shareholders. It is legally constructed to focus on its and its owners’ self-interest”.

That opinion is indeed solid, very solid. Corporations don’t seek to maximise profits just because this is laid down by the law, as Rose suggests. The law merely reflects the underlying reality of capitalism. It’s not the law that needs changing – it never will  be on this point – but the whole profit system that needs dumping.

Cooking the Books: Capitalism cannot be reset (2021)

The Cooking The Books column from the March 2021 issue of the Socialist Standard

After the ‘Great Reset’ was proposed last June the only people to take any notice were conspiracists who saw it as a plan by a cabal of world leaders to impose a ‘New World Order’ with the ‘plandemic’ as the first step. This is nonsense but the proposal to ‘reset’ capitalism is not much better, as is explained in the same way as we would in this extract from a podcast by Peter Joseph on 20 January (LINK).

"The great reset was put forward by Klaus Schwab, the head of the World Economic Forum, if I remember correctly. He started talking about this around the beginning of COVID-19 in early 2020. Here’s what it says on their actual website, ‘To achieve a better outcome, the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country from the United States to China must participate, and every industry from oil and gas, to tech, must be transformed. In short, we need a great reset of capitalism.’ Yes, the great reset of capitalism. Which makes no sense at all since capitalism is actually the fundamental problem, affecting sustainability and all other such issues that this great reset professes to address.

I suppose it’s good to see more conversation, especially when it comes to the environment, but the very fact that the limits of debate have been set and that this is really about preserving capitalism, even though they want to create some idealized version of it called stakeholder capitalism, all this simply reveals another well-meaning pro-establishment spasm in the end. No different than all the climate conferences and biodiversity conferences that accomplish nothing because everyone refuses to look at the system structure as the actual problem, the economic system. It’s actually quite comical if you think about it, ‘We want to change the world, but not capitalism.’

And of course this notion of stakeholder capitalism is one from a long line of nonsensical, qualifying adjectives that people amend before the word capitalism to try and pretend like some sub distinction would ever make a meaningful difference. You see all over the place, crony capitalism, responsible capitalism, vulture capitalism, the social entrepreneur. My favorite is conscious capitalism, as if it ever could be given the very nature and incentives of the structure, once again. It doesn’t matter who’s in the positions. It matters what the structural incentives are.

Just to be clear here, this stakeholder capitalism is defined as ‘a system in which corporations are oriented to serve the interests of all their stakeholders. Among the key stakeholders are consumers, suppliers, employees, shareholders, and local communities. Under this system, a company’s purpose is to create long-term value and not to maximize profits, and enhance shareholder value at the cost of other stakeholder groups.’ I’m not even going to address the insurmountable idealism in that vague description other than to say, you can never take the core incentive out of the system if the system remains in any respect or form. It is nonsensical to say that somehow corporations are going to orient themselves respecting everybody in this kind of stakeholder environment and the ecosystem without maximization of profit and hence, exploitation. You can’t have capitalism without exploitation and profit and hence, exploitation. If those things are removed, then you’re in a completely different system by default.

So this great reset thing is just another spasm, a well-meaning joke, a ploy in fact to sort of pretend like we can make capitalism better when all empirical evidence shows that we cannot.

Pathfinders: Latter-day Neros (2019)

The Pathfinders Column from the May 2019 issue of the Socialist Standard

‘The politics that’s needed to prevent the climate catastrophe—it doesn’t exist today. We need to change the system, as if we were in crisis, as if there were a war going on’. Teenage climate activist Greta Thunberg, who shot to global prominence in 2018 by missing school days to go on strike alone outside the Swedish parliament in Stockholm, is disarmingly frank about herself and the task as she sees it:

  ‘I have Asperger’s syndrome, and to me, almost everything is black or white. I think in many ways that we autistic are the normal ones and the rest of the people are pretty strange. They keep saying that climate change is an existential threat and the most important issue of all. And yet they just carry on like before. If the emissions have to stop then we must stop the emissions. To me, that is black or white. There are no grey areas when it comes to survival. Either we go on as a civilization or we don’t. We have to change.’

It’s no longer a matter of worry or concern. Now there’s desperation in the air. Following Greta Thunberg’s initiative, schoolchildren around the world are going on strike. She was invited to speak to the World Economic Forum at Davos, where she gave them short shrift: ‘Some people, some companies, some decision makers in particular have known exactly what priceless values they have been sacrificing to continue making unimaginable amounts of money. I think many of you here today belong to that group of people’ (Wikipedia).

Many politicians, eager to retain their eco-credentials while also neutralising a disruptive influence,  have showered hypocritical praise on her, even nominating her for the Nobel Peace Prize, but it hasn’t melted much ice. The girl who’s been compared to Joan of Arc and Pippi Longstocking has made it plain that tokenism isn’t enough, she wants direct action: ‘So everyone out there, it is now time for civil disobedience, it is time to rebel.’

Thinking along similar lines, a new non-violent direct action movement, Extinction Rebellion, has formed in the past twelve months, making Chartist-like demands for immediate government action including a Citizens’ Assembly to oversee climate action ‘as part of creating a democracy fit for purpose’. In London this past month demonstrators have been gluing themselves to trucks and trains and bringing traffic in the city to a standstill in action reminiscent of Reclaim the Streets back in the 1980s. The movement is supported by hundreds of academics through open letters which state among other things that ‘ Our government is complicit in ignoring the precautionary principle, and in failing to acknowledge that infinite economic growth on a planet with finite resources is non-viable […] The “social contract” has been broken, and it is therefore not only our right, but our moral duty to bypass the government’s inaction and flagrant dereliction of duty, and to rebel to defend life itself’ (Wikipedia).

If that wasn’t clear enough, a second open letter in December last year was even more direct: ‘Political leaders worldwide are failing to address the environmental crisis. If global corporate capitalism continues to drive the international economy, global catastrophe is inevitable.’

Strong stuff. Their solution? ‘We further call on concerned global citizens to rise up and… do whatever’s necessary non-violently, to persuade politicians and business leaders to relinquish their complacency and denial. Their “business as usual” is no longer an option. Global citizens will no longer put up with this failure of our planetary duty. Every one of us, especially in the materially privileged world, must commit to accepting the need to live more lightly, consume far less, and to not only uphold human rights but also our stewardship responsibilities to the planet.’

Now David Attenborough, to many people the ultimate authority on life on Earth, has produced a new BBC documentary warning of biblical End Times: ‘If we have not taken dramatic action within the next decade, we could face irreversible damage to the natural world and the collapse of our societies’ (Climate Change – The Facts, BBC One, 18 April).

Drastic as this sounds, it’s not even the worst forecast out there. A 2018 paper by a University of Cumbria academic is so damning that it has reputedly resulted in people seeking therapy (LINK). Arguing that it is now simply too late to consider how to limit global warming, Professor Jem Bendell instead promotes the idea of ‘deep adaptation’ in the face of ‘imminent near-term social collapse’. That’s starvation, violence, permanent water and power outages, riots, and all coming to streets near you within the next ten years, he says.

The evidence for global warming is so well known that it is not worth repeating. Even the most die-hard denialist has to face the fact that the twenty warmest years on record have been in the last 22 years. Professor Bendell’s evidence for imminent social collapse rests largely on two factors. One is Arctic ice melt and the loss of the ‘mirror effect’, where heat is mirrored back into space. The loss of this effect is expected to add the equivalent of an additional 25 percent of all global warming over the last 40 years. The second factor is more speculative: submarine methane hydrates, gigantic deposits of frozen methane on the ocean floors, could be released into the atmosphere by oceanic warming causing general social collapse and possibly a wholesale extinction event from which humans would not be excluded. ‘If all the methane gets out’, said an International Energy Agency spokesman in 2014, ‘we’re looking at a Mad Max movie’ (see this column, July 2017).

Socialists, if we were numerous enough and had a sufficient media profile, would be getting out in front of this debate and telling Greta Thunberg and Extinction Rebellion in no uncertain terms to stop putting any faith whatsoever in governments and business leaders, because these people aren’t the solution to the problem, they are the problem. It’s no good talking about ‘global corporate capitalism’ as if there was some other form of ‘clean’ capitalism we could adopt instead. A system predicated on private ownership and the accumulation of profit simply cannot be made to work in the interests either of the majority of people within it, or of the planet itself. It might seem self-evident to activists that we are all in the same boat, environmentally speaking, but the biggest environmental mistake of all is the one they are themselves making, which is that the rich 1 percent who ultimately control what happens on Planet Earth can be cajoled, persuaded or reasoned with if it means them giving up their power and ownership. Like a lot of latter-day Neros, they will keep their wealth and privilege at all costs, even if means watching the Earth burn.

Greta, and Extinction Rebellion, if you’re reading this, now is not the time for rebellion, it’s the time for global revolution. We need to stop making helpless appeals to princes, and start taking over their palaces.

Paddy Shannon

Davos Elites Think Globally, Act Greedily (2014)

From the March 2014 issue of the Socialist Standard

At the annual World Economic Forum, global elites gather to dream about solving the problems of capitalism through cooperation.

  Every capitalist knows this about his worker, that he does not relate to him as producer to consumer, and [he therefore] wishes to restrict his consumption, i.e. his ability to exchange, his wage, as much as possible. Of course he would like the workers of other capitalists to be the greatest consumers possible of his own commodity. But this is just how the illusion arises – true for the individual capitalist as distinct from all the others–that apart from his workers the whole remaining working class confronts him as consumer and participant in exchange, as money-spender, and not as worker. (Grundrisse; my emphasis)

Apologies for plunging straight into a quote from Marx to begin this article, but it seems related to the illusion that animates the World Economic Forum, an annual meeting in Davos, Switzerland of capitalist movers and shakers, movie-star wankers, professional do-gooders, and Bono.

One striking thing about this elite gathering is how its participants believe that capitalists (or at least other capitalists) might look beyond their own profit interests to solve some of the problems that their beloved profit system generates.

Professor Schwab has a dream

The first WEF was held in January 1971, under the impetus of Klaus Schwab, a German economist who remains the event’s executive chairman. At first the meeting only brought together European capitalists, and it was called the European Management Forum (renamed the World Economic Forum in 1987).

The official WEF website says that Professor Schwab’s ‘‘inspiration’’ for creating the Forum was the ‘stakeholder principle,’’ which states that ‘‘the management of an enterprise is not only accountable to its shareholders but must also serve the interests of all stakeholders, including employees, customers, suppliers and, more broadly, government, civil society and any others who may be affected or concerned by its operations.’’

You might say, then, that the Forum’s underlying concept is the idea – or the plea, really – that capitalists should broaden their vision beyond the narrow realm of their own profit chasing.

Today the WEF describes its mission as ‘‘improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.’’

‘‘We live in a fast-moving, highly interconnected world, and our existing systems, structures and formal institutions no longer suffice,’’ Schwab notes. ‘‘Pressing global problems can arise quickly and without warning. . . . Today, to address these issues, the world needs a level of global cooperation that is increasingly difficult to attain, precisely due to the growing complexities and interdependencies in the world.’’

The WEF is meant to serve as a mechanism for this global cooperation. And it would be hard to argue against the need for cooperation, or to disagree with the description of today’s world as increasingly interdependent and interconnected.

But it is also pretty clear that there are some serious limits to the degree of cooperation possible between business leaders (and their political lackeys), not only in different countries but within their own.

And the reason is again related, in some ways, to that quote from Marx. As he points out, although it might seem logical for capitalists to cooperatively raise the living standards of workers (as potential consumers), each capitalist firm must also extract from its own workers as much surplus value as it can to remain competitive – for the unprofitable capitalist will not remain a capitalist for long.

Genuine cooperation to solve fundamental problems is out of the question in a society where there are not only irreconcilable class differences, but conflicts between the capitalists themselves, who are competing against each other in domestic and global markets.

Lots of problems, few solutions

Yet the WEF remains upbeat about the potential for alleviating global problems through cooperation spearheaded by business leaders. Its website claims that the ‘‘Forum’s experience since its foundation in 1971 shows there are few issues that cannot be adequately progressed by convening the most relevant actors from all sectors – business, government and civil society – in a high-level, informal environment of trust.’’

But the experience of seeing the WEF, every year, address the same sorts of global problems – unemployment, environmental devastation, gender inequality, poverty, corruption, armed conflict, and so on – suggests that some issues have hardly been ‘progressed’ at all.

The gap between the awareness of the problems, and the inability to do much about them, is striking. In its numerous reports, the WEF list up issues that attest to the dismal reality of capitalism, but in most cases offers only the vaguest proposals or wishful thinking in response.

For instance, its Global Agenda Council on Fragile States and Conflict Prevention notes that, ‘‘Some 1.5 billion people in an estimated 40 countries live in an environment marked by persistent conflict and fragility . . . confronted by a myriad of simultaneous and often overwhelming challenges, including armed conflict or political violence, serious and persistent human rights violations, and threats from organized crime and terrorist networks.’’

And then, in the very next sentence, we are told that, ‘‘Viewed through a different lens, however, today’s fragile states are potentially tomorrow’s emerging markets. More than three-quarters of states classified as ‘fragile’ possess extensive mineral and energy resources and post impressive growth rates.’’

Similar examples can be found in the WEF report, ‘Outlook on the Global Agenda 2014,’ ‘which lists the ten ‘‘most pressing issues’’ of the coming year; these include widening income disparities, persistent unemployment, diminishing confidence in economic policies, and a lack of values in leadership.

After the report notes, for instance, how ‘‘growing income inequality is an issue of central importance’’ and lists various concrete manifestations of this inequality, it clings to the haziest of solutions:

  In order to counteract income inequality, it’s essential to tackle poverty in an integrated way that has a long-term impact. We need to give people the capacity to be resilient, to take on challenges and to learn the skills they need to work toward more prosperous futures.

Similarly, the report recognizes that the world faces ‘‘persistent structural unemployment’’ (and is careful to warn that it will escalate social unrest if not addressed), but can only offer the vague hope that governments will ‘’create regulatory structures that encourage employment and economic stability.’’

The same contrast between a fairly clear recognition of the problems and a lack of solutions is on display in the WEF’s Global Risks Report, listing the ‘‘ten global risks of highest concern.’’

The top risk for 2014 is ‘‘financial crises in key economies,’’ followed by such problems as ‘‘structurally high unemployment/underemployment,’’ ‘‘severe income disparity,’’ and ‘‘global governance failure,’’ as well as problems related to the natural environment. The report reads like an indictment of capitalism, even though it tries to claim that the problems can be solved or alleviated, provided there is adequate global leadership.

Conspiracy or dunces?

The conspiracy theorist might like to imagine gatherings such as the Forum at Davos as rather sinister events, where corporate elites hatch their evil plans. But that is almost a comforting notion; as if the capitalist system could yield to plans or control, rather than simply being the composite of all the narrow-minded economic actors chasing after their own profits by whatever means necessary.

In fact, the business savvy of global corporate elites does not lend them the power to shape, or even foresee, the future direction of capitalism. They are along for the ride like the rest of us, although travelling first-class.

‘‘Cautiously optimistic’’ is the verdict most likely to be offered by one of these elites when asked to comment on where the global economy is headed in 2014 and beyond. In other words, ‘‘Fuck if I know.’’

But that is not to suggest that the problem comes down to a lack of intelligence on the part of those elites, as Leftists are prone to argue. None of us can predict, exactly, what the coming years will bring for the capitalist economy, just as Marx, in his day, was not able to predict the exact moment when a general crisis might break out. Certainly we can be ‘‘confidently pessimistic,’’ as Marx was, about what our life will generally be like under capitalism, knowing its fundamental contradictions, but that does not make us fortune tellers.

What we can feel safe to predict, though, is that the comforting talk at Davos about working together to improve the world for all ‘‘stakeholders’ ‘won’t do much if anything to change the actual behaviour of capitalists and capitalism.

Michael Schauerte

Pathfinders: Desperate Deal in Davos (2016)

The Pathfinders Column from the February 2016 issue of the Socialist Standard

Not many people can be unaware that there is an antibiotic crisis looming, caused by big pharma moving out of antibiotic research into more profitable fields of enquiry, like hair restoring or erectile dysfunction.  Ask most people why this is happening and they will probably tell you it's because drug companies are run by greedy psychopathic bastards who couldn't care less about public health.

Back in October 2012 this column pointed to the fact that, for a number of very good reasons, drug companies simply couldn't make any money out of antibiotic research and that this amounted to the human race being failed by its own market system.

Confirmation of this has been provided by pharmaceutical companies themselves. At the recent Economic Forum in Davos, 85 drug companies signed a joint declaration promising to invest in antibiotic research if governments would agree to develop 'transformational commercial models' (BBC Online, 21 January).

The document, signed by Pfizer, Merck, Glaxo-Smith-Kline and Johnson & Johnson among others, stated that the current economic development model had 'largely failed' and that the 'formidable' (i.e. expensive) challenges of antibiotic research were the reason most companies had pulled out of the field.

What they mean is, they're not charities and they're not going to run at a loss, and if governments won't help meet the costs, new antibiotics aren't going to be made, even if we die of bubonic plague as a result.

This is as direct from the horse's mouth as it gets. Now even capitalist companies are frustrated at the operations of the market system. Will governments work out a deal with the drug companies? Maybe.

What speaks volumes is that they have to have this discussion at all. If capitalism really worked the way its promoters and propagandists like to claim, we wouldn't need all these special fixes and deals and arrangements and restructurings and 'transformational commercial models'. It would just work. Trains would run. Houses would get built. People would get fed. Antibiotics would get made.

The fact that it doesn't work is attested by, among other things, these desperate Davos conferences. Instead of an economic powerhouse, capitalism looks more like a patient under 24 hour supervision in an intensive care unit, kept alive only by the greatest of collective will and effort.

This isn't the first time capitalism's economic logic has failed the entire human race. In 2006 the Stern Review described climate change as the 'greatest market failure the world has seen'. Well, so far, but a sudden outbreak of death by gonorrhoea, laryngitis, TB or tetanus from a minor cut might very well change people's minds about that.

One wonders what it will take to make people realise that abolishing capitalism isn't just one of several viable options, it's already an urgent survival imperative.

Either capitalism goes, or homo sapiens might. This planet isn't big enough for the both of us.

PJS