Republished from leftoutpodcast

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Mark Twain wrote of the late nineteenth Century as a Gilded Age in America, in which vast inequality and insecurity were masked by a veneer of wealth concentrated in the hands of the few. In his new book Guy Standing suggests that we are now living through a Second Gilded Age. Only this time, it’s global.

Guy Standing, best-selling author of The Precariat, argues that governments and international institutions have combined to build the most unfree market economy ever created. It is a deeply corrupt system in which income and wealth are increasingly channelled to the owners of property – financial, physical and intellectual – at the expense of everyone else.

The book reveals how global capitalism is rigged in favour of this ‘rentier’ class to the detriment of workers – not just those in low-paid jobs, but many professionals and entrepreneurs. While wages stagnate, rental income has soared. A powerful plutocracy and elite has enriched itself, not through production of goods and services, but through ownership of assets, including patents and other forms of intellectual property, and the private exploitation of scarce resources.

It has been aided by government subsidies, tax breaks, corrupt deals and the ongoing privatisation of public services. Debt has become an integral part of the system. Meanwhile, labour markets are being transformed by outsourcing, automation and the rise of the on-demand economy, generating more rental income for the few while creating an ever larger precariat.

The age of rentier capitalism has been entrenched by the corruption of democracy, manipulated by the plutocracy and aided by its concentrated ownership of the media. The Corruption of Capitalism shows why the rise of rentier capitalism must be reversed. If it is not, dire social and political consequences will follow.

Advance praise for The Corruption of Capitalism:

“The Basic Income is an idea whose time has come, and Guy Standing has pioneered our understanding of it … As we move into an age where work and leisure become blurred, and work dissociated from incomes, Standing’s analysis is vital.”

Paul Mason, author of Postcapitalism: A Guide To Our Future

“Guy Standing’s incisive critique … should put politicians and ruling elites on the alert.”

John McDonnell, shadow Chancellor of the Exchequer

“In this thoughtful book, Guy Standing focuses on the central problem of modern capitalism … and suggests useful and important solutions.”

Robert Reich, Labor Secretary to President Clinton, 1993–97

Guy Standing is a professor at the School of Oriental and African Studies, University of London, and a Fellow of the Academy of Social Sciences. He was previously Professor of Economic Security at the University of Bath, Professor of Labour Economics at Monash University, and Director of the Socio-Economic Security Programme of the International Labour Organization, in the United Nations. He is a co-founder and honorary co-president of the Basic Income Earth Network. His books include A Precariat Charter: From Denizens to Citizens (2014); The Precariat: The New Dangerous Class (2011), Work after Globalization: Building Occupational Citizenship (2009), and Basic Income – A Transformative Policy for India (2015).

Photo by Pulpolux !!!

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I stated (I can’t claim originality — I think maybe the original was David Graeber?) that “Capitalism didn’t make your iPhone. Workers did. Capitalism just determines how the rents are distributed.” In response, someone said “Capitalism created the freedom that allowed people to invent the iPhone.” I pointed out to them all the ways that Apple’s profits from the iPhone depend on the use of the state to restrict freedom, both directly by using “intellectual property” to impede free cooperation and replication of technology outside their corporate framework, and indirectly through state subsidies to the offshoring of production to countries where workers are easier to exploit. The would-be defender of capitalism immediately piped up “What do subsidies have to do with capitalism? That sounds more like government to me.”

Aha. So the iPhone demonstrates the wonders and productivity of “free market capitalism,” but all the state-enforced monopolies, subsidies and other government intervention that Apple’s actual profit model depends on are “government.” Gotcha.

Sorry, but you can’t have it both ways. You can use “capitalism” as the name either for an idealized free market system that has never existed in practice, or for the actually existing historical system that you’re an apologist for. You can’t do both. If you start with the corporate capitalism that Apple is part of, and then take away the historical legacy (and ongoing process!) of peasant land enclosure, colonialism and neo-colonialism, slavery, land and resource grabs, “intellectual property” and other monopolies, and restrictions on the free movement and association of labor… well, you don’t have much left.

If you want to argue that “real capitalism has never existed,” and repeat “That’s not capitalism, that’s corporatism!” like a broken record, fine. But you can’t turn around then and use the products of a transnational corporation like Apple as an example of capitalism. If you do, you’re either stupid or a liar. It’s that simple.

And when you get right down to it, “capitalism” is a really bad term for a free market system. The word originated in the early 19th century as a name for the real-world historical system of capitalism, that emerged from the late Medieval economy from about 1500 or so on. And the state was absolutely integral to the emergence of that system of political economy, and to the form it took. It was a system in which the state actively intervened in the market, in all the ways (and more) I listed two paragraphs above, and did so on behalf of capitalists.

The use of “capitalism” by self-styled “free market” advocates only came later. It was a word that already had a long history — a history, in Marx’s words, written in letters of blood and fire — and was clearly identified with specific class interests. So when Mises and Rand chose that word, a word with those bloody associations and class identifications as their name for the “free market” — and named their ideal system after capital, one particular factor of production, at that! — you damn well better believe they had an agenda, and knew exactly what they were doing.

Corporate capitalism is not the free market, no more than was Soviet state communism. Both capitalism and state communism are coercive systems of power that parasitize on the creativity and cooperative labor of freely interacting human beings, so that those in power — whether CEOs and coupon-clippers or commissars — can live off the products of ordinary people’s efforts and ingenuity.

Citations to this article:

• Kevin Carson, When is Capitalism Not Capitalism?, News LI, 2016-01-19
• Kevin Carson, When is capitalism not capitalism?, Augusta Free Press, 2016-01-23

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