How a capitalist discovered that capitalism is trash

Me as a capitalist

Me, circa 2009, in my “Fat Cat Capitalist” prime

As a former business owner and serial entrepreneur, I once loved capitalism. I found the system to be incredibly efficient, fair, and brimming with hope for the downtrodden people of the world.

Here was a system that stripped power from tyrants placed it in the hands of common people. Capitalism had defeated aristocracy and given everyone a chance to build their own fortune. By starting my own business, I believed I could create jobs, help my community, and make some money fairly and honestly along the way. I would deliver good services to my clients, giving them a fair price, and treat my employees with respect and dignity. Building a business up from scratch seemed like a truly noble calling that would give me a unique opportunity to have some impact in the world while simultaneously improving my own station in life.

And so, when I was 19 years old, I bought my first professional video camera and some cheap lights and a microphone and started offering my services to non-profit organizations and anyone else who needed good, cheap media production services.

As the company matured, I began to notice some cracks in the foundation of my capitlalist dreams.

Over time I slowly built my company up, brick by brick. I moved the business from the hallway of the house I shared with three other dudes into an actual real life office. I hired employees. I started joining boards for community organizations and showing up at Local Chamber of Commerce meetings and did as much pro-bono work for non-profits and arts organizations as I could handle. I wasn’t making much money at all, since I was investing all of the profits back into the company and paying salaries for my employees. Financially the company was squeaking by, but growing, slow and steady.

As the company matured, I began to notice some cracks in the foundation of my capitallist dreams. For starters, I just couldn’t pay my employees very much. I was barely taking home enough to survive on my own, and my employees were severely underpaid, but the economy was on life support in the late 2000’s so we all tried to muscle through it with austerity and grit.

Another problem was securing large contracts. We were operating in the Deep South and the “Good Ol’ Boys Network” was a very real thing. It was incredibly difficult to break in and secure a contract with any of the big players as a scrappy start-up, but we did land some fairly big accounts which kept the lights on along with a ton of five-and-dime contracts with other small, struggling businesses. But the lion’s share of high-price work was going to larger and more established firms with deep pockets and deeper connections into the power structures of little old South Carolina.

Car Dealer

God, I wanted a used car dealership account!

Every time I saw a local commercial or an ad in the newspaper that was produced by one of these old, expensive firms, I bristled. The work of these behemoth competitors was generally hackish, poorly executed, by-the-numbers, and completely lacking in imagination… But I know for a fact that they commanded huge sums of money to do this work! Just one of those poorly-shot 30 second commercials for a local car company, law firm, or government office would have paid me and all of my employees for an entire year, and they weren’t even very well made!

Another thing that stuck in my craw was the local “advertising community.” If you wanted in on the professional organizations you had to pay extremely expensive dues. If you wanted to win awards you had to pay a lot to play, with very high entry fees. I’ve since learned that these awards are a total racket and anyone can pay a half a grand or more to get an award for your business with a weirdly specific name like “Best Company to Work For in Chattanooga” or “Best Small-to-Mid-Size Grommet Wholesaler in Montanna.” Suffice to say my company never won any awards despite all the hard work we put into our services.

At any rate, we struggled along and tried to make a name for ourselves. It felt, to me, like we were a family, a ragtag group of outsiders who were trying to break in to the big leagues, and any day now we’d land that huge contract that would put us on the map. And we did get some big contracts with the US Army, GE, and a few other big names you’d probably recognize, but even then it was usually because they were putting together a little side project with a small budget and needed something cheap, not good. All that meant for us was that we’d have to work our asses off to make “national quality work” while still just receiving the same meager budgets we always had.

Author working on a film set

We tried hard to do a lot with very little

But we tried hard and did the best we could to do quality work. We considered ourselves artists and we wanted to make things that we could be proud of. Sometimes it wasn’t easy, due to time and budget constraints, but we tried hard and sought out clients who were looking for value and an honest, creative partner to work with.

When I look back on the business I was building now, I realize I made some huge mistakes. A for-profit enterprise in a capitalist society has one purpose: to turn a profit. And the only way to make that happen is to charge clients more and pay less for things like equipment and employee wages.

There were definitely ways I could have cut costs. I could have outsourced most of the web development we did to Vietnam or another developing country and paid those coders and designers $3 or $4 per hour to do work that was decent. There was a lot of demand for websites in the low-budget range and we could have set up a design farm with a friendly American sales staff on the front end and a digital sweatshop on the back end cranking out templated sites that “did the job.”

There were many instances where I could have fleeced a client for a few thousand more dollars.

The clients wouldn’t even notice, since most of them were baby boomers who spent more time at the golf course than surfing the web. But we wanted to do work that was excellent and hand-crafted, with all of the little details taken into consideration.

There were many instances where I could have fleeced a client for a few thousand more dollars. One woman started a restaurant with her life savings, which were considerable, and was willing to essentially hand over a blank check for our work. But she was sweet and becoming elderly and started the restaurant so she could have some income while she was retiring and she had some health problems, so I cut her a break and we did the work at the same rate we offered all our other clients.

I did a lot of pro-bono work. There were a lot of arts and charity organizations that desperately needed media and marketing work and there weren’t many folks out there that could deliver what they needed. So I personally put in countless hours at free or substantially reduced rates because I wanted to support these groups, which meant I had much less time to go out on sales calls and try to drum up business.

2008 was fun, wasn’t it?

There were many non-profits that crashed along with the banks in 2008. Suddenly their most loyal and generous contributors were on the ropes, donations dried up, and they had to send us tear-jerking emails about how they can’t pay this month, hopefully next month. We helped these clients with some pro-bono work to try to help them bring in a few more donations in those troubled times.

That situation reminded me a lot of my grandfather, who was a shade-tree diesel mechanic in rural South Carolina. He kept old and rusted long-haul trucks running, and the owner-operators of those ancient hulks were always having hard times. It meant my grandfather would often have to wait weeks or months or years to get paid for the work he had done. When my grandmother would ask why he didn’t go over and demand a payment from a trucker, my grandpa would often have to say, simply and honestly, “He’s behind on the truck. If he pays me he’ll lose the truck and then he’ll never be able to pay me all the money he owes me. I’ll lose a customer, and he’ll be out of a job.”

So it seems that I inherited this kind of humble and selfless business management style from my grandfather. It’s the kind of community-minded stewardship that will drive any business to failure under capitalism.

Even though I considered my employees and myself to be a close-knit “family” in my mind, it didn’t stop those employees from becoming disgruntled and frustrated by their low wages. They often became understandably unmotivated. I tried to give them the “stick with it” pep talk and they stuck around for a long time (perhaps mostly because of the dismal prospects of the job market at that time). But why didn’t I think to just make it a co-op? I could have given equal share of the business to all my full-timers and we would all share a stake in the company, share the load of debt when times were bad, and have more motivation to push forward and achieve greatness together! Instead I horded sole proprietorship.

Child dressed as captain

When I look back on myself in my capitalist days, this is what I see

Why was I so miserly about keeping that albatross of a struggling business secured so tightly around my neck, and my neck alone? Because I was fooled by a lifetime of capitalist propaganda into believing that by starting a company I am somehow entitled to be the master and commander of the entire enterprise, and to take full credit for all of the successes (and profits, if there were any) that resulted from the hard work of my employees. As I’ve explained before, I felt like I was entitled to be the captain of the ship. Why? Because I was the one who initially spent an hour filing the LLC paperwork online? What a weird reason to give someone authoritarian power over a company. But it made sense at the time in my arrogant and capitalism-addled mind.

I may have been motivated by some kind of weird selfish God complex, but truly successful capitalist institutions are motivated by profit, and profit alone. There are only two ways to increase profit: you can charge your customers more or pay less to produce the product or service you are offering. On the surface this would seem to lead to efficiency. It’s easy to be fooled into believing that competition and the free market will lead to lean and efficient companies which offer the best stuff at the best price. But how is that working out in reality?

Forget my failing business, let’s look at the most successful ones:

Wagetheft protest sign

Would you like fries with your stolen labor value?

First you have businesses like McDonald’s. It’s pretty remarkable that McDonald’s can offer a full meal with a beverage for three or four dollars. It’s certainly not the best food in the world but it tastes okay and it’s incredibly consistent. A Big Mac in Seoul, Korea tastes exactly the same as a Big Mac in Denver, Colorado… think about how difficult that must be to pull off! So on the surface it seems like McDonald’s is a great example of a success of capitalism.

But McDonald’s pays their employees miserably low wages… and they know it. And of course we all know the shortcuts McDonald’s takes to make their food so cheap. So consumers get their cheap fast food, sure, but it’s made from substandard ingredients and requires exploitation of workers to achieve it.

This is the formula all huge chain restaurants will always need to function with under capitalism: pay the employees as little as you can get away with. Make compromises: will you offer higher quality food that costs more and reduces volume, or lower quality food that’s dirt cheap and lends itself to a volume-based business model?

Next we have businesses that produce “high quality” merchandise that is expertly crafted. Take Rolex for example, which produces incredibly well-made time pieces crafted by some of the finest engineering and artisanship in human history. It would stand to reason that these watches won’t be cheap. But are they over-priced? Of course they are! They have to be!

The shareholders of Rolex earn millions of dollars – operating profits are around 30% per year – and of course there are the additional millions sunk into marketing the product. If we stripped capitalism out of the equation, don’t you think we could make enough high quality watches so that everyone who wants one could have one?

Factory workers in Indonesia

Don’t the people who make your shoes deserve fair and honest compensation?

Look at the high quality shoes made by Nike. You’re paying over $100 for a pair of shoes made at a factory in a foreign country where workers are making $0.50 per hour to make them while the CEO made almost $50,000,000 in 2016. Do you think the CEO works that much harder than the Indonesian factory workers? Wouldn’t you feel better putting those shoes on your feet if you knew they were made by workers who were fairly compensated and worked in clean, safe, healthy conditions?

This is the nature of the beast of capitalism! Capitalists love to talk about how much they care about their customers and their employees, but the fact of the matter is that under capitalism customers and employees are little more than figures on a profit and loss sheet to be moved around until one number is as high as possible: the number under the heading “shareholder profits.”

The free market doesn’t care if your food is made from fresh, wholesome ingredients. It doesn’t care if people have a good living wage or a healthy work environment. It only cares about that bottom line, and companies that will do anything and everything they can to increase profits for shareholders will always be the ones that rise to the top.

Do we really want all of the institutions of humanity motivated by greed and profit? Is that really the kind of “efficiency” we want to place our value in?

Look at the monstrosities that are created with this capitalistic profit-seeking algorithm: McMansions that are poorly made and horrible to look at. Medicines that are so prohibitively expensive that sick people are dying so crooked CEOs can buy obscure rap albums. Companies that are gearing up to replace human employees with robots as quickly as possible because they sincerely and earnestly simply do not give a shit about the people who work for them day in and day out.

And, yes, you will always fork over too much money for any product or service under capitalism.

Capitalism is bad for employees because it reduces them to little more than parts in a profit-driving machine that can be replaced and eliminated as soon as it’s profitable to do so. Capitalism is bad for consumers because it places far more value in the appearance of quality and value than on actual quality and value. Look at all the money that goes into marketing a product or service. Every year billions of dollars are spent to convince you that a hamburger that isn’t really very good tastes great so that you will fork over too much money for a substandard product.

And, yes, you will always fork over too much money for any product or service under capitalism. Why? Because every for-profit firm has to pull in substantial profits for the shareholders! Capitalist enterprises must inflate prices and drive down wages at every opportunity because they must maximize profits and squeeze out as much profit as possible from workers and from customers.

Capitalism had its place in history, but it is simply absurd that we continue, to this day, to run our entire civilization on a system that is designed to fleece workers and consumers for as much value as possible so that it can be siphoned into the pockets of an incredibly small number of treasure-hoarding capitalists.

Leftists believe that there are much better alternatives to capitalism. We believe that there are better motivating factors than mere profit to drive the engines of human enterprise. We dare to ask:

What if food were made for people with the goal of good nutrition for families, less impact on the environment, and just being more delicious?

Closed factory

It’s reprehensible that factories must close simply because it’s more profitable to open them somewhere else where employees are paid less.

Every time a for-profit restaurant serves up a meal, a substantial amount of that value is stripped away and scooped up by the capitalist owners of the restaurant. What if all of that stolen value remained in the pipeline? What if it went to the cooks and the servers so that they could better provide for their families, or went into the food so that we could enjoy higher quality meals?

What if factories didn’t have to close just because they aren’t turning a profit for investors? What if the people in Detroit who knew how to build cars, and wanted to build cars, didn’t have to lose their jobs and suffer just because the capitalists made more money by moving the factories overseas.

Capitalism is irrational and inefficient! We don’t need capitalists to inject waste and inefficiency and risk into our systems of service and production. Talk to any cook and they’ll tell you that they love making food. Talk to any line worker at a factory and they’ll tell you they want to make good products for people to cherish and enjoy. But they also want work environments that are healthy and nurturing and supportive, and they want living wages.

We can abandon capitalism.

We can abandon capitalism. We can seize the means of production for ourselves and guide ourselves without the harsh and unsympathetic demands and commands of capitalists. There is nothing holding us to this outmoded economic system except for the propaganda of the powers that be and a fear of the unknown.

I admit it. I was a terrible business owner. I made all the wrong decisions: I tried to help my community when I should have been focused on helping myself. I tried to pay my employees more when I should have been paying them less, or better yet firing them and replacing them with overseas sweatshop workers. I was trying to focus on the art and craft of my industry when I should have been focused on cutting corners and creating an illusion of quality where there wasn’t any. I was trying to offer quality and value when I should have been doing my best to fleece my customers and pack in as much filler as I could possibly get away with.

It turns out I just wasn’t cut out to be a capitalist. And thank god for that! Because capitalism is not the system I thought it was.

Capitalism is not efficient, because it puts all emphasis on profits for the owners instead of practical benefits for workers and consumers. Capitalism is not fair, because it steals labor value from workers and inflates prices for end-users. Capitalism does not give us hope, because the future of capitalism will always be a future where we have even less and they have even more.

I have a lot of regret over the fact that I spent over a decade trying to steal labor value from my employees, but I feel so much better about myself now, having committed myself to the cause of liberating workers and building a society where we can all take pride in our work and own it for ourselves.

“Communism is the history of riddle solved, and it knows itself to be this solution.” -Karl Marx

If you’d like to learn more about how it is truly possible to build a world without capitalism, I hope you’ll stick around and subscribe to this blog on Facebook and YouTube. You can also read some of the books on my reading list to discover more about how a leftist society would function. The best book to begin with, in my opinion, is The Conquest of Bread by Pyotr Kropotkin. It’s over a hundred years old but has passed the test of time as an outline for how we can create a post-capitalist society. I will leave you for now with this quote from Comrade Kropotkin:

Fine sermons have been preached on the text that those who have should share with those who have not, but he who would act out this principle is speedily informed that these beautiful sentiments are all very well in poetry, but not in practice. “To lie is to degrade and besmirch oneself,” we say, and yet all civilized life becomes one huge lie. We accustom ourselves and our children to hypocrisy, to the practice of a double-faced morality. And since the brain is ill at ease among lies, we cheat ourselves with sophistry. Hypocrisy and sophistry become the second nature of the civilized man.

But a society cannot live thus; it must return to truth or cease to exist.

4 Responses to “How a capitalist discovered that capitalism is trash

  • How do you get the time to post so much content? Also why not expand your reading list? There is barely anything on it. One suggestion would be chapter 1 of The German Ideology by Karl Marx, its not a very hard read. Otherwise very good post, although I am not fan of capitalism one of the few things are I am good at is business related work. That’s why I am doing a Accounting course at uni, its a shame I am only good at business stuff but I don’t think there is any jobs in the humanities.

    What do you think about my situation?

    • Emerican Johnson
      9 months ago

      As far as posting content… Maybe I should get out more? 😐

      As for the reading list… mea culpa, it does look a bit barren. I’ll start fleshing that out. The German Ideology is a great newbie book, I agree!

      As for your situation… I’m no expert, but it seems to me that accounting is a perfectly practical skill and I’d imagine learning it will give you a wide variety of opportunities. NGOs and non-profits and charity orgs need accountants, as do environmental agencies, as do arts organizations, as do co-ops and trade unions. There could be countless opportunities for you to use your accounting degree in a non-capitalist manner.

      Alternatively, even if you do work in a capitalist-oriented field, you can still volunteer or donate some of that sweet capitalist money you earn to leftist and socially oriented causes. I’d say, pick the job you’re good at and that you love and do what you have to do to survive withing capitalist society. Even post-revolution, we’ll still need bean counters in some capacity or another!

      • Thanks for your thoughtful reply. I choose accounting as I did decent at it in High school and there seems to be a demand for it in Australia. I never thought of using my skills I will gain in a non capitalist manner, seems like a good idea If I have the ability to do it. Otherwise its a job that should provide a middle class life, its matter of survival.

        Your post is right about the conflict between wanting to provide value to your community and wanting to get as much profit as possible so that your business survives and expands. There is a lot of irrationality in the system, which many people fail to see.

        If you ever get burnt out from doing leftist theory I recommend looking to other philosophies and philosophers. Right now I am studying Nietzsche thought and existentialism in my free time and it is quite interesting to learn about the many ideas he explains throughout his books. looking too much at leftist theory gets boring and tiring, to the point where it makes my mood go sour.

        It cost your brain more resources to reject your previous ideas and reject the status quo. Its easier to accept the current situation but harder to be constantly against it. Thats why I have taken a break from leftist theory(expect your stuff of course) for my own mental health.

        Do you feel the same way?

  • Annoying Capitalist Here
    The same guy who posted a comment on almost all of your videos with the following request:
    Please describe a better system for the advancement of human prosperity.

    I think capitalism is highly efficient. There is nothing in capitalism that says you can’t build a cooperative. And you could have helped your community by doing pro bono work, but maybe not so much while your company is still starting up? Maybe you could have offered different prices for different types of work, something based on hours worked. If it takes more hours because it’s of higher quality then it should be more expensive. You then come up with the cost per hour and decide what margin you choose the margin that you think is fair for the risk you are taking. You could decide that the margin is zero, and you get paid the same salary as all your coworkers/co-owners. But higher quality is always more expensive than lower quality because it takes longer. Then you give your customers a table with the quality and corresponding price, and they choose what they want. If nobody wants to pay for what you have then you are not adding enough value to society.
    Mcdonalds feeds 1% of the world population and employees over 375 000 people. Are you telling me they are all being exploited? Do you know how many lower class families achieved financial security because they managed to become franchisees? Trust me, if it was possible to offer 4$ meals that are also healthy and tasty somebody would have already done it. And guess what, there are loads of healthy fast food places popping up, at least in my country (Portugal) where you can get a healthy high-quality meal for as low as 5€.

    And by the way, those Nike sweatshops (which I don’t condone, obviously) still pay better than a lot of other local jobs.

    All the problems of capitalism can be solved by changing the character of investors and entrepreneurs. If market participants made decisions based not only on profit but on social & environmental impact as well, all would be solved. And guess what, social entrepreneurs are on the rise and Impact investing is becoming a pretty big asset class.

    The best system, in my opinion, is a values-based social market economy – a capitalist market combined with a welfare state where all market participants care about the triple bottom line and don’t compromise their values. Because if consumers don’t buy from immoral companies then the profit motive will compel them to become good guys.

    I recommend that you read the essays about Good Capitalism by the School of Life to better understand my view:
    http://www.thebookoflife.org/utopia-series-how-capitalism-should-be-reformed/
    http://www.thebookoflife.org/category/capitalism/

    But I’m always open to different viewpoints, so I would like to know exactly what system do you propose.

    Cheers,
    Your Capitalist Pig Friend From Portugal

Leave a Reply Text

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.