Ever since the 2008 financial crash, the free market system has endured a withering assault by academics, intellectuals and those whose economic fortunes were crushed.
The magnitude of the economic calamity has prompted many voices to call for the dismantling of the free enterprise system to put an end to capitalism once and forever.
Considering such reactions, they’re proportional the enormity of the impact the banking industry’s failure had on middle- and working class lives, in retrospect. Three years after the 2008 crash, U.S. poverty grew over 21%; median household income dropped from $57k to $52k during an overlapping three-year period. Over six million households had their homes foreclosed. In spite of the economic suffering endured by rank and file citizens, it appears that the calls for such dramatic and damning change to the free enterprise system were outlandish and overwrought.
It occurred to me while deciding how to assemble the parameters of this writing, why not consult the oracle du jour ? ChatGPT so I located one particular site that featured the still newfangled technology I typed in the following query can capitalism survive without systems of debt and servitude like the seconds stroke of a stopwatch ChatGPT had returned with a succinct, one paragraph response.
Here was ChatGPT’s answer:
Yes, capitalism can exist without systems of debt and servitude, as debt and servitude are not inherent features of capitalism. However, debt and servitude have often been used in capitalist systems to maintain power imbalances and extract profit, so their elimination would require intentional changes to the economic and social structures of capitalism.
Debt and servitude “not inherent features of capitalism”? We could debate that, but I wanted to focus on what else it said. This phrase, I believe, is the smoking gun: “debt and servitude have often been used in capitalist systems to maintain power imbalances and extract profit…” (Is it just me, or does the ‘taint’ of Marxist analysis flavor this tacit admission?)
As there’ve been discussions about ChatGPT’s potential for machine-derived sentience, this phrase would be my Exhibit A in support of the defendant. I sense a reluctance from the AI app after asserting debt and servitude weren’t inherent to a free enterprise system. It’s a justifiable reticence, given the mainstream history’s narration of Western economics, stretching back to the Age of Exploration. A revision of that history illustrates that debt and servitude have absolutely been crucial mechanisms powering free market enterprise.
Eduardo Galeano’s Open Veins of Latin America marks the year 1492, not just for the occasion explorer Christopher Columbus encountered civilizations of the Western hemisphere — what was then considered “The New World;” it also marked the completion of Spain effort kicking out the Moors from the peninsula — a task that took seven centuries to complete. “The [Spanish] Crown was mortgaged. It owed nearly all of the silver shipments [from the New World], before they arrived, to German, Genoese, Flemish, and Spanish bankers” (p. 34).
Other European colonial powers like Portugal, France and Great Britain seized their respective shares of the slave trade, which sourced human chattel from the continent of Africa (after finding the health and physical endurance of Western hemisphere indigenous too weak and unreliable). Stolen humans became in and of themselves just one of the many commodities produced as a result of the Age of Imperialism.
One third to one half of the Europeans arriving at colonies in North America, disembarked ships as indentured servants and convicted criminals serving out their sentences as indentured servants. In Howard Zinn’s A People’s History of the United States, the book explains the forced relocation of debtors accomplished two goals: it removed an underclass from the European continent while populating North American colonies with cheap, exploitable labor.
Even upwardly mobile merchants in the English colonies endured hardship trying to stay out of the red as importers of goods shipped from the mother country. As recounted in Tom Shachtman’s The Founding Fortunes: How the Wealthy Paid for and Profited from America’s Revolution: “To obtain British goods to sell in America, these merchants had to borrow from the British suppliers, at 2.5 percent for a year; and then to extend their own credit to retailers and artisans” (p. 30). In this scenario, a chain of debt had been established to enable trade to circulate. The author suggests this factored into the reasons why the colonies decided to break away from England (I will admit never hearing about debt as a rationale for revolution in U.S. History class). Do I need to underscore this country’s founding was imbued by the scourge of debt?
Given the legacy of debt and servitude’s role in capitalism, it should surprise no one that we live as a nation of debtors, collectively and individually. The National debt stands at $32 trillion. Student debt is at $1.77 trillion. Consumer debt towers at $17 trillion. Medical debt amounts to $195 billion (it remains the number one cause of bankruptcy in the United States).
Even though debt-related incarceration was ruled unconstitutional by the U.S. Supreme Court nearly two centuries ago, the institution lives on today. The mere existence of debtor’s prisons reveals capital’s contempt for human dignity, hammering the point that our species is as interchangeable as livestock or bananas.
By interrogating capitalism’s reason for being, the intent of this writing seeks to highlight the integral mechanism’s of the economic system. Its defenders are incapable of questioning its legitimacy because of dishonest framing: beginning the conversation about individual freedom and ideals of liberty. As long as they keep the conversation vague, they never have to answer the question: freedom and liberty for whom?
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This post was previously published on MEDIUM.COM.
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