How the Rational Irrationality of Capitalism Is Destroying the World

Capitalism leads to actions only a self-destructive wastrel would want, but does so by pure rationality.

Think of rationality as being of two types: Means-ends and internal-coherence.

Means-ends rationality says: “I want to get to Point A. How do I do that?” Or, “I want to grow a garden so I can eat food. What are the steps involved?”

Internal-coherence is related to a system. Perhaps I want to go to Heaven, and am a Catholic. I examine the Catholic system and decide that works of charity, baptism, and regular confession are the most important things to do.

If you are not a Christian, then these activities appear quite insane–as might the idea of “going to Heaven.”

“What’s ‘heaven,'” you might ask.

On the other hand, while one might quibble about someone’s garden (“Why not just buy the food” or, “You aren’t using enough fertilizer”), we all know that food is needed and that it makes sense to get food.

Meanwhile, the Christians have realized that eternal damnation, meaning eternal (what happens to those without Christ) is the worst thing that can ever happen. They have also discovered that burning someone alive will make sure that person doesn’t suffer eternal torment. So they start burning people alive, because no matter how much that hurts, it’s better than eternal torture.

This is entirely rational within a certain Christian world-view. Anything you do to stop someone from going to Hell is justified, because nothing that you can do to anyone is worse than what they will endure in Hell. War, conquest, forcible conversion—nothing is worse than eternal torture.

This is rational within certain Christian systems. To anyone outside the Christian system, it is insane.

Conquering people to impose democracy follows the essential same logic. It is only internally coherent and logical. Rational.

Let us examine the logic of capitalism.

In a market, if two people or groups agree to a trade, then that trade benefits both groups. If it did not benefit both groups, the agreement would not be made. If someone wants to buy something, (presumably) it has utility for them. Perhaps I like greasy hamburgers and sugary pop. Those things may make me sick, but I know that I get the most utility out of them, and it is not up to anyone else to say that their ill effect on my health outweighs the greasy deliciousness of the burger or the sugar high from the pop. An exchange, mutually agreed upon, is always more beneficial to the parties involved than no exchange; otherwise it would not happen.

Profit is how the capitalist system determines who is doing the most good. If people are willing to pay you more for you for goods than the your cost of production, then they place a value what you are doing. The more they are willing to pay, the more your work (or goods) is valued. The more profit you make, the more you should be doing whatever you are doing, because profit based on voluntary exchanges indicates the mutual benefit of  both parties involved. As long as you can make a profit, it indicates that scarce resources are being used well.

The product may be hamburgers. It may be firearms. In the purest form, it does not matter. Drugs, sex–anything to which both parties voluntarily agree.

So, if I’m involved in a voluntary exchange, and I’m making a profit, I should continue to do what I’m doing, and the more profit I make the more I should do of it. More profit gives me more control of resources, so I am able to do more, and I do.

This is the basic capitalist feedback system (in theory). Do more of whatever is profitable and consensual, and this will perpetuate itself automatically because those who make the most profit are doing the things people value the most compared to the cost of producing those things.

So why have we produced to so much carbon that we’re going to kill a billion people or more?

Because capitalist rationality is internal-coherence. It does not question ends. By definition, anything which makes profits and is consensual is good. (I’m leaving out questions of perfect consensuality, like power and so on, deliberately.)

Take planned obsolescence. Goods are designed so they will wear out and break down; they make them hard to repair when they do break, so people will buy new ones.

This was a big fight in the late 19th and early 20th century, by the way.  Engineers wanted to design goods which would last as long as possible, but managers didn’t: If you can sell a person whatever you make only once in their life, or twice, you make a lot less money than if it breaks down and has to be replaced every few years.

This means, of course, that you have to mine a lot more material. People have to work a lot more to make goods which would not be needed if they were designed to last as long as possible. This generate more carbon and other pollutants.

In every way this is bad: People have less free time, there is more pollution, and we use up more scarce resources. No one sane would create such a system from first principles.

But it makes sense within the Capitalist system. The exchanges are all voluntary, it leads to maximum profit, and profit indicates scarce resources are being turned into utility in the best way possible.

It is rational to destroy the planet’s life-bearing ability by over-using resources and spewing more pollution into it than necessary. It is rational to do more work than is necessary to produce the goods people need (or even want) so you can sell again and again, rather than just selling once.

This is internal-coherence rational, not means-ends rational. I don’t know about you, but I’d prefer to work less and have everything (or most everything) I need and want, while polluting less and using less resources. I will posit that the vast majority of human beings on Earth would agree.

Internal-coherence rationality is so close to always bad that you might as well just say that it is. Yes, one always has to ask, “Why do we want X?” when dealing with means-end rationality, but means-ends rationality has a tendency to cut out the shit. When we examine it carefully, most of us want enough stuff for the least possible work and want to be healthy, which means we don’t want a lot of pollution.

Capitalism is not means-end rational. The argument was made for a long time, “but it works.” By which it was meant, “it produces a lot of goods and money.” But it produced too many goods we didn’t need and money is only a means, for most people, to get the goods they need.

We will have to find a better way. The easy sneer that “Communism failed” is irrelevant. Capitalism is failing as well, and its failure will lead to a billion deaths or more because of climate change and other foreseeable failures (like over-use of resources.) We knew these were problems, but driven by the internal-coherence rationality of Capitalism, we kept doing what we knew would have unacceptable consequences.

When finding that better way, we must start by asking what the economy is supposed to do. I will suggest it doesn’t exist to make a profit, it exists to make sure people get what they need (and as much as possible what they want) in a fashion that is sustainable, doesn’t make us sick or unhappy, and doesn’t threaten the conditions necessary for sustaining life on Earth.

It is “rational” to destroy the Earth for profit. But only if you’re so wrapped in the logic of Capitalism that you’re no longer rational.

Or particularly sane.

(This is the 4th in a series on Capitalism.  Read “The Death of Capitalism”, “What Capitalism Is”, and “Did the Industrial Revolution Require Land Clearances, Slavery, Genocide, and Empire?”)