Monday, August 17, 2009

Capitalism is for Suckas: or, How Constructive Capitalism is our Future


Note: This post grew out of two things. One is a post that I wrote
last week on how the Crack Epidemic was in its essence pure capitalism
and my personal transformation from a person who wanted to be an
banker to someone who aspires to be a scholar and community
organizer. The second thing was a kind of crowd sourcing that happened last
week. After I wrote the post Rafi and
I went back and forth on Twitter about
constructive capitalism. I suggested that
we have a conversation about it.
Two people, @
professorf and @chartreuseb, suggested that we continue
the conversation publicly, which would provide a transcript and
give Umair
(@umairh) a chance to respond. The blog seemed like a good space to
do this, so, here it is.

Renina Jarmon: How do you expect for constructive capitalism to survive
in a system
where profits at all costs have been the mandate
since the late 70's when corporations
mutated into multinationals?

Rafi Kam: First I should say that you really should do a thorough reading
of Umair's blogs because he lays these things down every
week, I'm just going to do my best to explain what I've taken
away from there.

I think your question has it backwards because if you look in the
news for the past few years it's the short term profits at all costs
approach that cannot be expected to survive. Destroying the world's
resources only works for so long, having interests in opposition to
your customers only works for so long. Companies that don't solve
problems or offer any real value to the world have now been paying
the price in the marketplace, and (bailouts aside!) that will continue.

Detroit failed because they ignored the fact that they needed to make
better cars and tried to make all their profits with creative financing
tricks. If they had spent the money and effort to make economical
cars to solve the world's problem that everybody knew about decades
ago, they'd be fine right now. Instead they tried to make their business
be about financing. Ok, so good riddance Detroit! May the next
generation of American car makers hopefully learn from your mistakes.

The mortgage crisis grew out of banks screwing people. The lesson
people are beginning to learn is that this is never truly sustainable. If
your business is based on fucking over your customer you are ultimately
screwing yourself too. I mean this was particularly true with mortgages
where the stakes were so high. I expect sustainability to be the focus
for companies instead of short term profits because that is the landscape
we are looking at today. So you see a new lending model in a company
like Kiva, which is creating this healthy system of trade and tackling the
problem of global poverty. The company enables participation and
benefits on all sides instead of being there to just suck value from the

And these changes in theory will come about mostly because
they are the best means to compete, as Umair says "there is nothing
more asymmetrical than an ideal" meaning having an ideal to base
your company on is actually this insanely huge business advantage.
I believe in that very strongly and we have all witnessed it in action. It
trounces our traditional notions of positioning or economic advantages.

We've seen in our lifetime the disruption of so many things, just in the
past ten years. So too this notion of old school capitalism. It will
change because it needs to and the shift has already started.

Renina Jarmon: I have taken the time to re-read some of Umairs posts,
The Generation M Manifesto, The Case for Constructive Capitalism,
(one of my all time fav's) Michael Jackson and the Zombie Economy,
What Would a Fair Labor Ipod Cost and The Niche Paper Manifesto.

The central premise of capitalism is the endless accumulation of
capital, at all costs. It appears that what Umair is describing isn't
capitalism at all.

For example, in the Generation M Manifesto, Umair says, "You wanted
to biggie size life: McMansions, Hummers, and McFood. We want
to humanize life."

Humanizing life is antithetical to capitalism.

Capitalism turns on the expendability of workers and treating people
like property.

If he has to call it Constructive Capitalism to sell it, than I can see the
benefits of that, as I am more concerned with building local sustainable
communities than I am with arguing over the semantics of a naming of
our new economy.

I am excited that Umair is talking about a change in what institutions
value. In the the essay, "A Time to Break Silence", Martin Luther
Kind jr. talked about the need for a radical revolution of values in
our society. Perhaps the changes he is arguing for in our institutions
will also be mirrored in us individually. The possibility for this happening
is why I write, work, and in the near future, will teach.

As a Black woman and a feminist who is interested in sustainable
economies my general contention is that the crisis that our
American institutions are facing around labor and our economy
is rooted in the United State's primary contradiction, which is the
forced free labor of millions of enslaved Africans.

U.S. Capitalism is rooted in U.S. slavery.

It is brutal, bloody and treats workers like they are expendable,
when the workers are the
ones creating value. The notion of the
founding fathers and the planter class taking what it needed, in this
case, the forced free labor of enslaved Africans, for the purpose of
sustaining a new nation, while simultaneously declaring its freedom
from Britain has never been both acknowledged and dealt with.

Perhaps the sustainable, local economies of the future can be an
opportunity to address this primary contradiction.

Renina Jarmon: What are some examples of business that employ
constructive capitalism?

Rafi Kam: As I said on Twitter, the most disruptive example is Google.
It was created to solve a pressing problem "organize the world's information",
it became a powerhouse of wealth because it solved another huge problem
to make advertising more relevant and accountable. This offered a solution to
a real problem for advertisers and web publishers. It stated a list of core
values about itself and how it thinks the web should work most famously
"Don't Be Evil".

That isn't to say I'm comfortable with the amount of power Google has but
by stating that as their constitutional value they themselves created that
dialog/standard and asked to be judged accordingly. They've
stressed innovation and open-ness. Employees are required to spend
a big chunk of time creating their own projects. Google's free APIs and
free apps have changed the game, provided a foundation for developers
and forced competitors to change their models. And referencing your
first question, quite clearly, they don't act according to a profits at all
cost approach.

Some Umair favorites: Kiva, Etsy, Threadless, Flickr, Twitter, Netflix, Zipcar

I think there's a connection here between Umair's ideas on Constructive
Capitalism or Capitalism 2.0 and so many things that are currently part
of the Zeitgeist: web 2.0, open source, local farming, local economies,
purpose-driven marketing, collaboration over competition, empowering
people, small is the new big and so on. People seem more aware than
ever of how destructive business as usual is, so I think these trends
and ideas rise in response to that.

Renina Jarmon: I agree, with regard to the new companies that have come
along with a different model that acknowledges the community and
human dimension of business. I am all for artisanal, robust, sustainable,
small, if you will, slow communities.

However, if this crisis has taught us anything, it the importance of
considering the global implications of our actions.

Capital is incredibly flexible. I see that it is quite possible for our U.S.
economy to become more green, local and sustainable while the
economy of the Gobal South is turned into one populated by a
"permanent untouchables" class.

The way of life of folks in the Global North is subsidized by folks in
the Global South. While I know that you hated the video that I
sent you last April, The Story of Stuff about consumption, I found
it to be useful in demonstrating the ways in which the products
that we consume start someone where, and end up somewhere else.

What I am getting it is that it is quit possible for Capitalism 1.0 to
absorb our sustainable "Green Economy" by making it profitable
at the expense of the "Third" World.

The first example that comes to mind is the Tabacoo industry. Big
Tobacco was sued in the 80's over whether they lied about knowing
that cigarettes was inherently addictive. In the 90's teen anti smoking
advocates pushed for and Big Tobacco supported underwriting,
anti-teen smoking campaigns. Teen smoking went down in the US,
but it went up in Vietnam, China and arguably other places as well.

I ask you, what is to stop this from happening?
Wouldn't businesses have to be willing to operate from a minimal
to zero profits perspective in order for this to avoid this happening?

Renina Jarmon: If as you say, we are in the beginings of a new era,
how does your notion of constructive capitalism take the fact that we
are moving towards an automated jobless society into consideration?

Rafi Kam: That's a loaded question! I don't know that we're moving towards
an automated jobless society and don't even really understand what that
means. Industries rise and fall, and automation and outsourcing have
replaced many jobs but I don't see how we are moving to a jobless society.
It's not cost-effective to replace every job with automation and it's downright
impossible for some. But speaking to low-skill manufacturing or service jobs
that may have been replaced by automation, there's different possible
answers I suppose. You have initiatives like the one Obama campaigned
on to create "green" manufacturing jobs. Ideally you'd want to see a world
where we're creating better jobs and preparing more people for them.

But it's sort of this two-sided thing where having a whole bunch of people
in need of jobs is a problem for society to solve and also a potential
resource for people with capital. In a perfect world you would have
someone looking at the labor pool both those ways at the same time.
Maybe that's too optimistic. How's that for a perfect closing line to this Q&A.

Renina Jarmon: We are in fact moving towards an automated society.
My thinking about this comes out of a reading of James Bogg's The
American Revolution, pages from a Negro Workers Notebook. The
book, was written in 1963. His general contention is that based on
advances in technology, our society will become one in which automation
will force us to think about how to organize society based on our needs
instead of our wants.
I wrote about his book in a blog post last month
The Coming Jobless Society.

The notion of an automated society is a hard one to swallow, however
it is coming.
For every place that you see a machine replacing a
human a job has been eliminated. The further technology advances,
the more automated our society will become, the fewer jobs will be
Every time you use a computer, instead of working with a human,
a process has been automated and job has been lost. For instance,
in Detroit, the assembly line was automated in the '50's. Our current wars are
becoming automated via unmanned land and aerial vehicles.

For the most part email has eliminated both the need for receptionists
and the USPS. Garbage trucks are automated. Pay kiosks at
businesses, such as AT&T, the grocery store, the airport and Target,
have eliminated the need for customer service agents. Where there
was once 4 human employees you only need 2, or 1.

Taking all this into consideration, I come away from this Q & A with,
in many ways trying to reconcile the world that Boggs is talking about
with the world that Umair is advocating for.


chartreuseb said...

interesting discussion. glad you decided to post it. a few things.

1- I think Rafi did a good job of explaining Umair's concepts. What he didn't explain (because you didn't ask) was why his concepts are so important. So let me.

We are in an age of institutional collapse. Nothing works like it's supposed to. Schools health care, finance are all up in the air.

So we are in the middle of a great fight.

Just like we changed from an agricultural society to an industrial one we are in the middle of changing again. But questions are how will these new intitutions work. People who profited from the old ways are fighting tooth and nail to hang on to their peice of a pie that is getting smaller and smaller. But the new institutions haven't been built yet so a lot of people are confused and angry.

If we don't come up with the ideals that we will base the new institutions on we are going to be in a big mess, even bigger than we have now because nothing will work and no one will be satisfied.

That's what makes Umair's work important. Because it's a foundation to fix captalism as we know it.

2- I would not be worried too much about the singularity. What people place value on will change so there will always be jobs. Just think about all the jobs we have now that we didn't have just 5 years ago! The increase in technology just creates different jobs, it's not a sum-zero game.

Again I applaud you for having this conversation in public. Hopefully it will spark others to think more about the future we are creating. Our generation have the responsibility of creating the institutions which will effect the next 100 years. It'll be nice if we don't let profits dictate them like they did the last 100.

arieswym said...

I really enjoy your blog posts, I learn something new and gain a new perspective to think about life. I just want to say thanks

MB said...

whoa! did you know that i made and still rock a t-shirt that says capitalism is for suckas?!

hbsoul said...

"building local sustainable communities"

"it is quite possible for our U.S. economy to become more green, local and sustainable while the economy of the Gobal South is turned into one populated by a 'permanent untouchables' class."

i'm going to have to write a more full-bodied, longer response at another time that addresses the fact the concepts upon which the "green movement", sustainability, localization, etc. are not at all new, and that the very people that have been pressing for an alternative forms of economic development and globalization have been marginalized for years, and will continue to be marginalized even as powerful people in places like the U.S. latch on to and popularize weaker forms of their ideas. it's kind of frustrating. said...

hey. appreciate the writing. thanks. i also look forward to reading more of umair's writings.

curious as to why you title the post "capitalism is for suckas" since most of rafi's comments (and the little i have read of umair) appear to be in defense of a capitalist system?

I know the short answer prob is that there is an attempt to recognize and distinguish "constructive" capitalism from some "other" capitalism being loosely described. But I think it's important not to lose sight of the fact that nearly everything discussed falls very neatly within "Capitalism", qualifiers and adjectives aside.

For a long long time, majority of our country's so-called "institution's"/industries have been about creating value or valuable products & services through market competition and privately held means. Some companies/individuals have proven more successful, with more forward thinking and longer term strategies than others, but the structure and legal frameworks have remained mostly the same. Constructive capitalists (or I would prefer to say, "modern" constructive capitalists, because I would argue "constructivity" is not new), google and other progressive web companies included, are still about accumulation of capital, winning market share and basically the pounding of competition - again, primarily for private gains and through private means. I think it's beneficial to keep in mind that google is a public company. Also, the few successful people-oriented business examples given comprise a small percentage of our economy and arguably are non-essential to survival and/or production and/or reproduction. Health care and arguably automobiles excluded, the web 2.0s are not tools we "need". The Internet's infrastructure (ie cable companies), electric utilities and the like, these are the "institutions" that I feel would need to experience real change in order to significantly alter our world. Another great example, this time of a tool we do need, is health care and subsequently the notion of a single-payer health care system. A notion so grand and life-altering that it arguably (I know I'm using that word too much, but I need to qualify these contracted statements in the face of the short period of time I have to write) can not co-exist with certain other fundamental institutions within our system.

Seems like the focus here is more with respect to certain industries and business models (which granted have the capacity to comprise historically significant "institutions, but are they here?) than systems. At the same time I get the feeling the entire system is being critiqued or at least I pick up on a few hints in that direction.

Chartreuse mentions the idea of fixing capitalism, but having capitalism fit humanity's changing or newly recognized needs seems backwards to me. Backwards because sometimes the change in ideals is too significant for the system to support. Humanity declares "new" ideals and we build systems that fit them. Systems form (or collapse) around them.

Two other great concepts that are discussed - the global economy and the role of the USA therein, and the impact of technological advancements on society - are something I hope you investigate further and write about. Although a technological singularity is somewhat abstract, technological advancements have direct and sometimes immense effects on society.

Looking forward to reading more in the future.

...oh, and one last thing I forgot to ask, do you ever get the feeling that the 2.0ish companies or business models get more credit than deserved for being "progressive" when arguably it is the increasingly educated consumer/customer that is driving change?

M.Dot. said...

@ Chartreuse
Thank you for the context. I write about Capitlism and class a lot, so I presumed that my reader would know the context. That was much needed.

I am glad you like the posts. This is why I write. Keep coming back!

I'm Busted. I totally jack part of the title from your Tshirt. Credit where credit is due, no?

I went through 4 title ideas, they were all boring, except for your tshirt.

Thank you for stopping by and commenting.

The title of the post represents BOTH Rafi and my perspective.

I hear you on how Google is in fact public.
There is in fact a shift occuring.
What that shift is to and what the guiding principals will be is what this conversation was intended to illumniate.

You are right, the entire system IS being critiqued. I try and think and write in terms of systems when it comes to race, gender and money otherwise the arguement rests on individuals which isn't persuaive and relatively stupid.

Don't mind me, I have been reading Rules for radicals.

Re-changing the values to fit the current system.
You are absoutly right, and this is hard for many folks to imagine. Which comes first the new system or new values? Great question.

This is why I am sort of enamored with the Founding Fathers and the American Revolution.
It is a kind of Blueprint for radical change happening all around in real time.

I do disagree with you about Real Change.
The companies DO not have to change for Real Change to Happen. We as citizens do.
Power is maintained at the top, but it comes from the bottom. Always.

Regarding 2.0 companies earn the credit they get, I suppose. I guess a metric needs to consider what it item is being compared to. If course 2.0'rs look awesome, if brick and motar is hurting, no?

The educated/consumer and the fundamental change in how money make money is driving the change.

I would like to write more about global change and the economy. The techie stuff is more Rafi's domain. You sound like you have a handle on this, as well. If you have an idea for a future conversation, I am down to participate or faciliate.

G, would you be willing to answer questions for this post.

Unknown said...

you are right, capitalism doesn't work any more and its scientific base is erroneous.


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