Democracy and freedom Economist
Branko Horvat stated that "[I]t is now well known that capitalist development leads to the concentration of capital, employment, and power. It is somewhat less known that it leads to the almost complete destruction of economic freedom". Critics argue that capitalism is in fact not a
democracy, but a
plutocracy, because in capitalism there is a lack of
political,
democratic and
economic power for the
vast majority of the population. They say this is because, in capitalism, the
means of production are owned
privately by a minority of the population, with the vast majority having no control over the
economy. Critics argue that capitalism creates large concentrations of money and property in the hands of the
elite, leading to vast wealth and income inequalities between the elite and the majority of the population. Evidence for the fact that capitalism is
plutocratic can be seen in policies that benefit capitalists at the expense of workers, such as policies where taxes are raised on workers and reduced for capitalists, and the retirement age being increased despite it being against the will of the people. "
Corporate capitalism" and "
inverted totalitarianism" are terms used by the aforementioned activists and critics of capitalism to describe a capitalist marketplace—and society—characterized by the dominance of
hierarchical,
bureaucratic,
large corporations, which are legally required to pursue profit without concern for social welfare. Corporate capitalism has been criticized for the extent of power and influence that corporations and large business interest groups have over government policy, including the policies of regulatory agencies and political campaigns. Many social scientists have criticized
corporations for failing to act in the interests of the people; they claim the existence of large corporations seems to circumvent the principles of democracy, which assumes equal power relations between all individuals in a society. As part of the
political left, activists against corporate power and influence work towards a decreased
income gap and improved
economic equity. The rise of giant
multinational corporations has been a topic of concern among the aforementioned scholars, intellectuals and activists, who see the large corporation as leading to deep, structural erosion of such basic
human rights and
civil rights as
equitable wealth and income distribution, equitable democratic political and socio-economic
power representation and many other human rights and needs. They have pointed out that in their view large corporations create false needs in consumers and—they contend—have had a long history of interference in and distortion of the policies of
sovereign nation states through high-priced legal
lobbying and other
almost always legal, powerful forms of
influence peddling. In their view, evidence supporting this belief includes invasive advertising (such as
billboards, television ads,
adware,
spam,
telemarketing, child-targeted advertising and
guerrilla marketing), massive open or secret corporate political campaign
contributions in so-called "democratic" elections,
corporatocracy, the
revolving door between government and corporations,
regulatory capture, "
too big to fail" (also known as "
too big to jail"), massive taxpayer-provided corporate
bailouts,
socialism/communism for the very rich and brutal, vicious,
Darwinian capitalism for everyone else, and—they claim—seemingly endless global news stories about
corporate corruption (
Martha Stewart and
Enron, among other examples). Anti-corporate-activists express the view that large corporations
answer only to large shareholders, giving
human rights issues,
social justice issues, environmental issues and other issues of high significance to the
bottom 99% of the global human population virtually no consideration. American political philosopher
Jodi Dean says that contemporary economic and financial calamities have dispelled the notion that capitalism is a viable economic system, adding that "the fantasy that democracy exerts a force for economic justice has dissolved as the US government funnels trillions of dollars to banks and European central banks rig national governments and cut social programs to keep themselves afloat." According to
Quinn Slobodian, one way capitalism undermines democracy is by "punching holes in the territory of the nation state" to create
special economic zones, of which there are 5,400 around the globe, ranging from
tax havens to "sites for low-wage production . . . often ringed by barbed wire," that he describes as "zones of exception with different laws and often no democratic oversight."
David Schweickart wrote: "Ordinary people [in capitalist societies] are deemed competent enough to select their political leaders-but not their bosses. Contemporary capitalism celebrates democracy, yet denies us our democratic rights at precisely the point where they might be utilized most immediately and concretely: at the place where we spend most of the active and alert hours of our adult lives".
Thomas Jefferson, one of the
founders of the United States, said "I hope we shall crush ... in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country". In a 29 April 1938 message to the
U. S. Congress,
Franklin D. Roosevelt warned that the growth of private power could lead to
fascism, arguing that "the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power. Statistics of the
Bureau of Internal Revenue reveal the following figures for 1935: "Ownership of corporate assets: Of all corporations reporting from every part of the Nation, one-tenth of 1 percent of them owned 52 percent of the assets of all of them". and in
his 1961 Farewell Address to the Nation brought attention to the "conjunction of an
immense military establishment and a large arms industry" in the United States and stressed "the need to maintain balance in and among national programs—balance between the private and the public economy, balance between cost and hoped for advantage". In
Das Kapital, Marx identified the commodity as the basic unit of capitalist organization. Marx described a "common denominator" among commodities, namely that they are products of labor and are related to each other by an
exchange value (i.e.,
price). By using the labor theory of value,
Marxists see a connection between labor and exchange value, in that commodities are exchanged depending on the
socially necessary labor time needed to produce them. However, due to the productive forces of industrial organization, laborers are seen as creating more exchange value during the course of the working day than the cost of their survival (food, shelter, clothing and so on). Marxists argue that capitalists are thus able to pay for this cost of survival while expropriating the excess labor (i.e.
surplus value). Critics argue that exploitation occurs even if the exploited consents, since the definition of exploitation is independent of consent. In essence, workers must allow their labor to be exploited or face starvation. Since some degree of unemployment is typical in modern economies, Marxists argue that wages are naturally driven down in free market systems. Hence, even if a worker contests their wages, capitalists can find someone from the
reserve army of labor who is more desperate. The act (or threat) of
striking has historically been an organized action to withhold labor from capitalists, without fear of individual retaliation. Some critics of capitalism, while acknowledging the necessity of
trade unionism, believe that trade unions reform an already exploitative system, leaving the system of exploitation intact.
Lysander Spooner argued that "almost all fortunes are made out of the capital and labour of other men than those who realize them. Indeed, large fortunes could rarely be made at all by one individual, except by his sponging capital and labour from others". Some
labor historians and scholars have argued that
unfree labor—by
enslaved people,
indentured servants,
prisoners, or other coerced persons—is compatible with capitalist relations.
Tom Brass argued that unfree labor is acceptable to capital. Historian
Greg Grandin argues that capitalism has its origins in slavery, saying that "[w]hen historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery." Some scholars, including
Edward E. Baptist,
Sven Beckert, and
Matthew Desmond, assert that slavery was an integral component in the violent development of American and global capitalism. The Slovenian
continental philosopher Slavoj Žižek posits that the new era of global capitalism has ushered in new forms of
contemporary slavery, including migrant workers deprived of basic civil rights on the
Arabian Peninsula, the total control of workers in Asian
sweatshops and the use of forced labor in the exploitation of natural resources in
Central Africa. Academics such as the
developmental psychologist Howard Gardner have proposed the adoption of upper limits in individual wealth as "a solution that would make the world a better place".
Marxian economist Richard D. Wolff postulates that capitalist economies prioritize profits and capital accumulation over the social needs of communities, and that capitalist enterprises rarely include the workers in the basic decisions of the enterprise. Political economist Clara E. Mattei of the
New School for Social Research demonstrates that the imposition of fiscal, monetary and industrial
austerity policies meant to discipline labor by reinforcing hierarchal wage relations and therefore protect the capitalist system through wage repression and the weakening of collective bargaining power by workers can increase their exploitation while boosting the profits of the ownership class, which she says is one of the primary drivers of the "global inequality trend". As an example, Mattei shows that over the last four decades in the United States, the profit share of national output increased while labor's share plummeted, demonstrating a symmetrical relationship between owner profit and worker loss, in which the former took from the latter. She adds that "an increase in exploitation was also evident, with real wages grossly lagging behind labor productivity."
Imperialism, political oppression, and genocide Near the start of the 20th century,
Vladimir Lenin wrote that state use of military power to defend capitalist interests abroad was an inevitable corollary of monopoly capitalism. According to Lenin, the export of financial capital superseded the export of commodities; banking and industrial capital merged to form large financial cartels and trusts in which production and distribution are highly centralized; and
monopoly capitalists influenced state policy to carve up the world into spheres of interest. These trends led states to defend their capitalist interests abroad through military power. According to economic anthropologist
Jason Hickel, capitalism requires the accumulation of excess wealth in the hands of economic elites for large-scale investment, continuous growth and expansion, and the exploitation of enormous amounts of cheap labor. As such, there was never, and could never have been, a gradual or peaceful transition to capitalism, and "organized violence, mass impoverishment, and the destruction of self-sufficient subsistence economies" ushered in the capitalist era. Its emergence was fueled by
immiseration and extreme violence that accompanied
enclosure and
colonization, with colonized peoples becoming enslaved workers producing products that were then processed by European peasants, dispossessed by enclosure, who filled the factories in desperation as exploited cheap labor. Hickel adds that there was fierce resistance to these developments, as the period from 1500 to the 1800s, "right into the Industrial Revolution, was among the bloodiest, most tumultuous times in world history." Sociologist
David Nibert argues that while capitalism "turned out to be every bit as violent and oppressive as the social systems dominated by the old aristocrats", it also included "an additional and pernicious peril—the necessity for continuous growth and expansion". As an example of this, Nibert points to the mass killing of
millions of buffalo on the
Great Plains and the subjugation and expulsion of the indigenous population by the U.S. military in the 19th century for the purpose of expanding ranching operations, and rearing livestock for profit. Capitalism and capitalist governments have also been criticized by socialists as
oligarchic in nature, due to the inevitable inequality. The
military–industrial complex, mentioned in
Dwight D. Eisenhower's presidential farewell address, appears to play a significant role in the American capitalist system. It may be one of the driving forces of American militarism and intervention abroad. The United States has used military force and has encouraged and facilitated
state terrorism and mass violence to entrench
neoliberal capitalism in the
Global South, protect the interests of U.S. economic elites, and to crush any possible resistance to this entrenchment, especially during the
Cold War, with significant cases being
Brazil,
Chile and
Indonesia.
Inefficiency, irrationality, and unpredictability Some opponents criticize capitalism's
inefficiency. They note a shift from pre-industrial
reuse and thriftiness before capitalism to a consumer-based economy that pushes "ready-made" materials. It is argued that a
sanitation industry arose under capitalism that deemed trash valueless—a significant break from the past when much "waste" was used and reused almost indefinitely. Critics relate the "ready-made" trend to a growing garbage problem in which, as of 2008, 4.5 pounds of trash are generated per person each day (compared to 2.7 pounds in 1960).
Anti-capitalist groups with an emphasis on
conservation include
eco-socialists and
social ecologists.
Planned obsolescence has been criticized as a wasteful practice under capitalism. By designing products to wear out faster than need be, new consumption is generated. Critics view planned obsolescence as wasteful and an inefficient use of resources. Other authors such as
Naomi Klein have criticized brand-based marketing for putting more emphasis on the company's name-brand than on manufacturing products. Some economists, most notably
Marxian economists, argue that the system of perpetual capital accumulation leads to irrational outcomes and a misallocation of resources, as industries and jobs are created for the sake of making money rather than satisfying actual demands and needs.
Market failure Market failure is a term used by economists to describe the condition where the allocation of goods and services by a market is not
efficient.
Keynesian economist Paul Krugman views this scenario in which individuals' pursuit of self-interest leads to bad results for society as a whole.
John Maynard Keynes preferred
economic interventionism by government to free markets. Some believe that the lack of
perfect information and
perfect competition in a free market is grounds for government intervention. Others perceive certain unique problems with a free market including:
monopolies,
monopsonies,
insider trading and
price gouging.
Inequality Critics argue that capitalism is associated with the unfair
distribution of wealth and power; a tendency toward market monopoly or
oligopoly (and government by
oligarchy); imperialism, counter-revolutionary wars and various forms of economic and cultural exploitation;
repression of workers and
trade unionists and phenomena such as
social alienation, economic inequality, unemployment and economic instability. Critics have argued that there is an inherent tendency toward oligopolistic structures when
laissez-faire is combined with capitalist
private property. Many socialists regard capitalism as irrational in that production and the direction of the economy are unplanned, creating many inconsistencies and internal contradictions, and thus should be controlled through
public policy. In the early 20th century,
Vladimir Lenin argued that state use of military power to defend capitalist interests abroad was an inevitable corollary of monopoly capitalism. In a 1965 letter to
Carlos Quijano, editor of
Marcha, a weekly newspaper published in Montevideo, Uruguay,
Che Guevara wrote: The laws of capitalism, which are blind and are invisible to ordinary people, act upon the individual without he or she being aware of it. One sees only the vastness of a seemingly infinite horizon ahead. That is how it is painted by capitalist propagandists who purport to draw a lesson from the example of
Rockefeller—whether or not it is true—about the possibilities of individual success. The amount of poverty and suffering required for a
Rockefeller to emerge, and the amount of depravity entailed in the accumulation of a fortune of such magnitude, are left out of the picture, and it is not always possible for the popular forces to expose this clearly. ... It is a contest among wolves. One can win only at the cost of the failure of others. increased from 1989 to 2013. A modern critic of capitalism is
Ravi Batra, who focuses on inequality as a source of both immiserization and system failure. Batra popularised the concept "share of wealth held by the richest 1%" as an indicator of inequality and an important determinant of depressions in his best-selling books in the 1980s. The scholars
Kristen Ghodsee and Mitchell A. Orenstein suggest that left to its own devices, capitalism will result in a small group of economic elites capturing the majority of wealth and power in society. Dylan Sullivan and
Jason Hickel argue that
poverty continues to exist in the contemporary global capitalist system despite it being highly productive because it is undemocratic and has maintained conditions of extreme inequality where masses of working people, who have no ownership or control over the means of production, have their labor power "appropriated by a ruling class or an external imperial power," and are cut off from common land and resources. They further contend that capitalism needs significant levels of inequality as capital accumulation requires access to cheap labor, and lots of it, as without it the system would be crippled. Italian economist and academic
Clara Mattei noted in her 2026 book
Escape from Capitalism that in Mumbai's
Dharavi, one of the largest slums in the world, an estimated 2 million workers produce over $2 billion in wealth, with the majority of it ending up in the bank accounts of large American shareholders, and concluded that "this vast inequality illustrates the deep contradictions of our capitalist economy that must be fought." In the United States, the shares of earnings and wealth of the households in the top 1 percent of the corresponding distributions are 21 percent (in 2006) and 37 percent (in 2009), respectively. Critics, such as Ravi Batra, argue that the capitalist system has inherent biases favoring those who already possess greater resources. The inequality may be propagated through inheritance and economic policy. Rich people are in a position to give their children a better education and inherited wealth, which can create or widen large differences in wealth between people who do not differ in ability or effort. One study shows that in the United States, 43.35% of the people in the
Forbes magazine "400 richest individuals" list were already rich enough at birth to qualify. Another study indicated that in the United States wealth, race and schooling are important to the inheritance of economic status, but that IQ is not a major contributor and the genetic transmission of IQ is even less important. Batra has argued that the tax and benefit legislation in the United States since the
Reagan presidency has contributed greatly to the inequalities and economic problems and should be repealed. According to sociologist Thomas Volscho, the
neoliberal revolution starting in the late 1970s resulted from a
class conflict in which the
political mobilizations of an increasingly class-conscious capitalist elite "against the New Deal of the 1930s, War on Poverty programs from the 1960s, and the power of organized labor" dramatically increased both the political power of
Wall Street and
economic inequality.
Critics of capitalism, particularly Marxists, identify market instability as a permanent feature of the capitalist economy. Marx believed that the unplanned and explosive growth of capitalism does not occur in a smooth manner, but is interrupted by periods of overproduction in which stagnation or decline occur (i.e.
recessions). In the view of Marxists, several contradictions in the capitalist
mode of production are present, particularly the internal contradiction between anarchy in the sphere of capital (i.e.
free market) and socialised production in the sphere of labor (i.e.
industrialism). In
The Communist Manifesto, Marx and Engels highlighted what they saw as a uniquely capitalist juxtaposition of overabundance and poverty: "Society suddenly finds itself put back into a state of momentary barbarism. And why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce". and that "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in firms ... I was shocked".
Property Pierre-Joseph Proudhon and
Friedrich Engels argue that the
free market is not necessarily free, but weighted towards those who already own private property. They view capitalist regulations, including the enforcement of
private property on land and exclusive rights to natural resources, as unjustly
enclosing upon what should be owned by all, forcing those without private property to sell their labor to capitalists and landlords in a market favorable to the latter, thus forcing workers to accept low wages to survive. In his criticism of capitalism, Proudhon believed that the emphasis on private property is the problem. He argued that
property is theft, arguing that private property leads to despotism: "Now, property necessarily engenders despotism—the government of caprice, the reign of libidinous pleasure. That is so clearly the essence of property that, to be convinced of it, one need but remember what it is, and observe what happens around him. Property is the right to use and abuse".
Mutualists and some anarchists support markets and private property, but not in their present form. They argue that particular aspects of modern capitalism violate the ability of individuals to trade in the absence of coercion. Mutualists support markets and private property in the product of labor, but only when these markets guarantee that workers
will realize for themselves the value of their labor. Not all pro-capitalists support the concept of copyrights, but those who do argue that compensation to the creator is necessary as an incentive. Such critics argue that while
neoliberalism, the ideological backbone of contemporary globalized capitalism, has indeed increased global trade, it has also destroyed traditional ways of life, exacerbated inequality, increased global
poverty, and that environmental indicators indicate massive
environmental degradation since the late 1970s. Some scholars argue that the capitalist approach to
environmental economics does not take into consideration the preservation of natural resources and that capitalism creates three ecological problems: growth, technology, and consumption. The growth problem results from the nature of capitalism, as it focuses around the pursuit of limitless
economic growth and the accumulation of capital. The innovation of new technologies has an impact on the environmental future as they serve as a capitalist tool in which environmental technologies can result in the expansion of the system. Consumption is focused around the capital accumulation of commodities and neglects the use-value of production. One of the main modern criticisms of the
sustainability of capitalism concerns the so-called commodity chains, or production/consumption chains. These terms refer to the network of transfers of materials and commodities that is currently part of the functioning of the global capitalist system. Examples include high tech commodities produced in countries with low average wages by multinational firms and then being sold in distant high income countries; materials and resources being extracted in some countries, turned into finished products in some others and sold as commodities in further ones; and countries exchanging with each other the same kind of commodities for the sake of consumers' choice (e.g. Europe both exporting and importing cars to and from the United States). According to critics, such processes, all of which produce pollution and waste of resources, are an integral part of the functioning of capitalism (i.e., its "
metabolism"). Critics note that the statistical methods used in calculating
ecological footprint have been criticized; some find the whole concept of counting how much land is used to be flawed, arguing that there is nothing intrinsically negative about using more land to improve living standards (rejection of the
intrinsic value of nature). Under what anti-capitalists such as
Murray Bookchin call the "grow or die" imperative of capitalism, they say there is little reason to expect hazardous consumption and production practices to change promptly. They also claim that markets and states invariably drag their feet on substantive environmental reform and are notoriously slow to adopt viable sustainable technologies.
Immanuel Wallerstein, referring to the externalization of costs as the "dirty secret" of capitalism, claims that there are built-in limits to ecological reform and that the costs of doing business in the world capitalist economy are ratcheting upward because of deruralization and democratization. A team of Finnish scientists hired by the UN Secretary-General to aid the 2019 Global Sustainable Development Report asserts that capitalism as we know it is moribund, primarily because it focuses on short-term profits and fails to look after the long-term needs of people and the environment, which is being subjected to unsustainable exploitation. Their report goes on to link many seemingly disparate contemporary crises to this system, including environmental factors such as
global warming and accelerated
species extinctions and also societal factors such as rising
economic inequality,
unemployment, sluggish economic growth, rising debt levels, and impuissant governments unable to deal with these problems. The scientists say a new economic model, one which focuses on sustainability and efficiency and not profit and growth, will be needed as decades of robust economic growth driven by abundant resources and cheap energy are rapidly coming to a close. Another group of scientists contributing to the 2020 "Scientists warning on affluence" argue that a shift away from paradigms fixating on economic growth and the "profit-driven mechanism of prevailing economic systems" will be necessary to mitigate
human impacts on the environment, and suggest a range of ideas from the reformist to the radical, with the latter consisting of
degrowth,
eco-socialism and
eco-anarchism. Some scientists contend that the rise of capitalism, which itself developed out of European
imperialism and
colonialism of the 15th and 16th centuries, marks the emergence of the
Anthropocene epoch, in which human beings started to have significant and mostly negative impacts on the earth system. Others have warned that contemporary global capitalism "requires fundamental changes" to mitigate the worst environmental impacts, including the "abolition of perpetual economic growth, properly pricing
externalities, a rapid exit from fossil-fuel use, strict regulation of markets and property acquisition, reining in corporate lobbying, and the empowerment of women".
Jason Hickel writes that capitalism creates pressures for
population growth: "more people means more labour, cheaper labour, and more consumers." He argues that continued population growth makes the challenge of sustainability even more difficult, but adds that even if the population leveled off, capitalism would get existing consumers to increase their consumption, as consumption rates have always outpaced population growth. In 2024 a group of experts including
Michael E. Mann and
Naomi Oreskes published "An urgent call to end the age of destruction and forge a just and sustainable future". They conducted an extensive review of the existing scientific literature on the issue. They blamed the ecological crisis on "imperialism, extractive capitalism, and a surging population". They proposed a paradigm shift that replaces it with a socio-economic model prioritizing sustainability, resilience, justice, kinship with nature, and communal well-being. They described many ways to achieve the transition.
Profit motive The majority of criticisms of the
profit motive centre on the idea that it encourages
selfishness and
greed, rather than serving the public good or necessarily increasing net wealth. Critics of the profit motive argue that companies disregard morals or public safety in the pursuit of profits. Capitalists seek to reduce spending to increase profits, often at the expense of workers, such as cutting wages and
downsizing, which causes
unemployment. The reason the profit motive is harmful is the fundamental contradiction between the interests of capitalists and workers: capitalists want to pay their workers as little as possible and make them work as much as possible to increase profits. In contrast, workers want to be paid fairly and have their increased productivity result in fewer working hours. This fundamental contradiction, critics argue, shows how illogical capitalism is, as it is a system in which two classes have fundamentally opposite interests which create conflict. Recently, a compelling criticism of unmoderated capitalism has emerged: it prioritizes capital over human well-being, except where human well-being contributes to capital production. Critics argue that such a system tends to reward sociopathic behavior. Consequently, they contend that pure (unmoderated) capitalism is inherently unsuitable as a foundation for society. As pure capitalistic models develop, they foster an increase in sociopathic behavior, which ultimately degrades societal functioning, defined by the well-being of most of its members. The detrimental processes associated with excessive sociopathic behavior include the spread of disinformation, the implementation of policies that create severe economic inequalities, and the manipulation of legal and judicial systems to benefit capital flow without regard for the majority's welfare. In response to this criticism, some advocate for a moderated capitalism that promotes policies valuing human well-being. This approach creates reward structures that are not solely tied to capital. However, one counterargument is that in a global society with diverse economic models, pure capitalism might prevail over moderated capitalism in the long run because it generates more economic power.
Comparison to slavery escort strikebreakers in
Buchtel, Ohio, 1884. Wage labor has long been compared to slavery. As a result, the phrase "
wage slavery" is often utilized as a pejorative for wage labor. Similarly, advocates of slavery looked upon the "comparative evils of Slave Society and of Free Society, of slavery to human Masters and slavery to Capital" and proceeded to argue that wage slavery was actually worse than
chattel slavery. Slavery apologists like
George Fitzhugh contended that workers only accepted wage labor with the passage of time as they became "familiarised and inattentive to the infected social atmosphere they continually inhale". With the advent of the
Industrial Revolution, thinkers such as
Pierre-Joseph Proudhon and
Karl Marx elaborated the comparison between wage labor and slavery in the context of a critique of societal property not intended for active personal use According to
Noam Chomsky, analysis of the psychological implications of wage slavery goes back to the
Enlightenment era. In his 1791 book
On the Limits of State Action,
liberal thinker
Wilhelm von Humboldt explained how "whatever does not spring from a man's free choice, or is only the result of instruction and guidance, does not enter into his very nature; he does not perform it with truly human energies, but merely with mechanical exactness" and so when the laborer works under external control, "we may admire what he does, but we despise what he is". Both the
Milgram and
Stanford experiments have been found useful in the psychological study of wage-based workplace relations. Additionally, as per anthropologist
David Graeber, the earliest wage labor contracts known were, in fact, contracts for the rental of enslaved people (usually the enslaver would receive a share of the money and the enslaved person another, with which to maintain their living expenses). According to Graeber, such arrangements were quite common in New World slavery as well, whether in the United States or Brazil.
C. L. R. James argued in
The Black Jacobins that most of the techniques of human organisation employed on factory workers during the Industrial Revolution were first developed on slave plantations. Some
anti-capitalist thinkers claim that the
elite maintain wage
slavery and a divided working class through their influence over the media and entertainment industry, educational institutions, unjust laws, nationalist and
corporate propaganda, pressures and incentives to internalize values serviceable to the power structure,
state violence, fear of
unemployment and a historical legacy of exploitation and profit accumulation/transfer under prior systems, which shaped the development of economic theory.
Adam Smith noted that employers often conspire together to keep wages low: To
Marxist and
anarchist thinkers like
Mikhail Bakunin and
Peter Kropotkin, wage slavery was a
class condition in place due to the existence of
private property and the
state. This class situation rested primarily on: • The existence of property not intended for active use. • The concentration of ownership in a few hands. • The lack of direct access by workers to the
means of production and consumption goods. • The perpetuation of a
reserve army of unemployed workers. For Marxists, labor as commodity, which is how they regard wage labor, provides a fundamental point of attack against capitalism. "It can be persuasively argued", noted one concerned philosopher, "that the conception of the worker's labour as a commodity confirms Marx's stigmatization of the wage system of private capitalism as 'wage-slavery;' that is, as an instrument of the capitalist's for reducing the worker's condition to that of a slave, if not below it". That this objection is fundamental follows immediately from Marx's conclusion that wage labor is the very foundation of capitalism: "Without a class dependent on wages, the moment individuals confront each other as free persons, there can be no production of surplus value; without the production of surplus-value there can be no capitalist production, and hence no capital and no capitalist!".
Supply and demand At least two assumptions are necessary for the validity of the standard model: first, that
supply and demand are independent; and second, that supply is "constrained by a fixed resource". If these conditions do not hold, then the
Marshallian model cannot be sustained.
Sraffa's critique focused on the inconsistency (except in implausible circumstances) of partial equilibrium analysis and the rationale for the upward slope of the supply curve in a market for a produced consumption good. The notability of Sraffa's critique is also demonstrated by
Paul A. Samuelson's comments and engagements with it over many years, stating: What a cleaned-up version of Sraffa (1926) establishes is how nearly empty are all of Marshall's
partial equilibrium boxes. To a logical purist of Wittgenstein and Sraffa class, the Marshallian partial equilibrium box of constant cost is even more empty than the box of increasing cost. Aggregate excess demand in a market is the difference between the quantity demanded and the quantity supplied as a function of price. In the model with an upward-sloping supply curve and a downward-sloping demand curve, the aggregate excess demand function intersects the axis at only one point, namely where the supply and demand curves intersect. The
Sonnenschein–Mantel–Debreu theorem shows that the standard model cannot be rigorously derived in general from
general equilibrium theory. The model of prices being determined by supply and demand assumes
perfect competition. However, "economists have no adequate model of how individuals and firms adjust prices in a competitive model. If all participants are price-takers by definition, then the actor who adjusts prices to eliminate excess demand is not specified". Goodwin, Nelson, Ackerman and Weisskopf write: If we mistakenly confuse
precision with accuracy, then we might be misled into thinking that an explanation expressed in precise mathematical or graphical terms is somehow more rigorous or useful than one that takes into account particulars of history, institutions or business strategy. This is not the case. Therefore, it is important not to put too much confidence in the apparent precision of supply and demand graphs. Supply and demand analysis is a useful precisely formulated conceptual tool that clever people have devised to help us gain an abstract understanding of a complex world. It does not—nor should it be expected to—give us in addition an accurate and complete description of any particular real world market.
Surveillance According to Harvard academic
Shoshana Zuboff, a new genus of capitalism,
surveillance capitalism monetizes data acquired through
surveillance. She states that it was first discovered and consolidated at
Google, emerged due to the "coupling of the vast powers of the
digital with the radical indifference and intrinsic narcissism of the
financial capitalism and its
neoliberal vision that have dominated commerce for at least three decades, especially in the Anglo economies" New information technologies continuously create conflict between privacy, the control over personal information disclosure, and surveillance. In a current capitalistic society, power is harnessed through a combination of both control and freedom. This fusion of control and freedom, seen through changes in sexuality and race, is a response to the growing privatization of data, networks, public services, and physical spaces, and also to the simultaneous entry of publicity and paranoia into people's lives.
Racism According to
Immanuel Wallerstein,
institutional racism has been "one of the most significant pillars" of the capitalist system and serves as "the ideological justification for the hierarchization of the work-force and its highly unequal distributions of reward". Critics of capitalism argue that racism benefits capitalists in several ways. Racism divides the working class and prevents them from uniting to demand better wages and working conditions. Capitalists benefit from competition and hostility among workers because they reduce workers' bargaining power and ability to organise. Racism was used to justify the exploitation and oppression of certain groups of people for economic gain, such as in the era of
slavery in the United States. Capitalists benefitted from the scapegoating of
Jewish people as a way to divert attention from the real cause of the problems. An example of this is
Henry Ford, founder of the
Ford Motor Company, who spread Anti-Semitic propaganda in his newspaper
The Dearborn Independent.
Vladimir Lenin argued that
Antisemitism was being used in
Tsarist Russia to distract the workers from the true problems inherent to capitalism by blaming the Jews. Others argue that while capitalism generally uses or transforms pre-existing racism depending on local circumstances, racism is not necessary for capitalism. Many theorists supportive of capitalism believed that a free market is a remedy for racism in a functioning society, because if some business owners engaged in discriminatory wage practices targeting minority ethnic groups, other entrepreneurs would take advantage of the opportunity to hire an equally capable worker for a lower cost, increasing the profitability of the latter. According to Jim Sidanius and Felicia Pratto, despite the theory's fluidity, reconciling free-market theory with observed data presents challenges, as supporters of free-market capitalism often exhibit a higher likelihood of discriminating against ethnic minorities. Left-wing commentators have argued that capitalism promotes racism alongside
culture wars over issues such as
immigration and representation of
ethnic minorities whilst refusing to address
economic inequalities.
Underdevelopment Marxist and Neo-Marxist theorists including Wallerstein,
Andre Frank and
Samir Amin have linked
underdevelopment with capitalism, emphasising the relationship between the metropolist centre and the periphery colony, theory of 'unequal exchange' and constituents of a single world capitalist system.
Dependency theory posits that peripheral economies are subordinated to the interests of the capitalist world economy which was initially established by European colonialism. Using the Latin American dependency model, the Guyanese Marxist historian
Walter Rodney, in his 1972 book
How Europe Underdeveloped Africa, described an Africa that had been consciously exploited by European imperialists, leading directly to the modern underdevelopment of most of the continent. The concept of
uneven development derived from the political theories of
Leon Trotsky. This concept was developed in combination with the related theory of permanent revolution to explain the historical context of Russia. He would later elaborate on this theory in 1930 to explain the specific capitalist laws of uneven development. According to biographer Ian Thatcher, this theory would be later generalised to "the entire history of mankind". == Counter-criticism ==