The COVID-19 pandemic has produced numerous examples of “disaster capitalism, and spectacular profits for billionaires.”
“History is clear that capitalist competition is sustained by an intense level of violence toward oppressed nations and classes.”
“Disaster capitalism,” a term made popular by author Naomi Klein, describes the many ways in which massive profits are accumulated from tragedy. Hurricane Katrina provides one of the starkest examples of the parasitic nature of capitalism. After the lower 9th ward of New Orleans was decimated and countless Black Americans uprooted, the public school system was privatized in its entirety. The COVID-19 pandemic has also produced numerous examples of “disaster capitalism.” Billionaires such as Jeff Bezos have seen their profits grow handsomely over the past year amid mass death and economic devastation.
A major limitation of the term “disaster capitalism” is that it insinuates that another kind of capitalism is possible. The myth that capitalism is not inherently exploitative or predatory is nothing new to the United States. Since the end of World War II, liberal economists such as Robert Reich have argued that a gentler form of capitalism is possible so long as New Deal-type reforms are a permanent fixture of economic life. Yet no amount of regulations or protections negate the fact capitalism doesn’t merely profit from disasters; it is the disaster.
The owners of capital, the capitalist class, rely on a myriad of institutions to convince the masses otherwise. Government officials and politicians tend to be the most openly vocal champions of capitalism due to their leadership role over the state—the organization responsible for enforcing the suppression of one class to the benefit of another. In his announcement of an executive order comprised of a host of regulations, Joe Biden carried on this tradition by claiming that “capitalism without competition isn’t capitalism. It’s exploitation.”
“Liberal economists argue that a gentler form of capitalism is possible.”
The problem with Biden’s formulation is that exploitation lies at the very root of capitalism. Capitalist competition has always rested at the foundation of the U.S. settler colony’s economic base. Land theft, genocide, and mass enslavement of Indigenous and African nations gave the U.S. an early competitive advantage over Western European rivals in the quest for global profit and supremacy. Capitalist competition has led to dozens of wars amongst capitalist powers. World War II, a war over colonial possessions, killed three percent of the world’s population—the majority occurring in China and the Soviet Union. History is clear that capitalist competition is sustained by an intense level of violence toward oppressed nations and classes.
But outright violence in the form of war is only the most naked form of the exploitation inherent to capitalism. Capitalism is a system of production based upon the accumulation of private profit. Capitalists own the means of production for this purpose and workers must sell their labor to them to survive. On the surface, this exchange appears fair and “democratic.” Workers receive a wage for their labor so that they can purchase basic necessities and perhaps become rich themselves. Joe Biden is just the latest mouthpiece of the capitalist class to boast of the “opportunities” that supposedly arise for workers under the regime of capitalist competition.
Capitalist competition is defined by several contradictions, all of which form a nexus of exploitation for the working class. Biden’s executive order is reflective of a very important contradiction within this nexus. The policy is geared toward addressing excessive mergers yet monopoly is exactly what capitalist competition generates. In the hunt to maximize profits, capitalists seek to consolidate the capital necessary to expand production at the lowest possible cost. Monopolization is a natural byproduct of capitalist competition which socializes the production process and intensifies the exploitation of the laboring classes.
“Monopolization is a natural byproduct of capitalist competition.”
But before a capitalist enterprise can compete, it must first extract surplus value from the workers who sell their labor in exchange for a wage. Workers are paid just enough to reproduce themselves. Whatever is left over from the exchange value of a commodity is pocketed by the capitalist as unpaid labor. The capitalist then uses its dictatorial ownership of profits to expand the enterprise, invest in new technology, and, of course, enrich themselves.
However, the lust to squeeze every drop of surplus value from the working class has limits. The toiling masses cannot possibly consume the value that they produce nor can they be allowed to perish from starvation on a total scale despite hunger being a widespread problem under global capitalism. An economic crisis ensues whereby excess capital (otherwise known as overproduction) is eliminated, throwing scores of workers into unemployment. As capitalist enterprises compete, the tendency to monopolize is hastened by the dual incentive to keep production costs down, especially the cost of labor, and economic crises at bay for as long as possible. Monopoly then leads to imperialism. Imperialism is the highest stage of capitalism in which finance capital assumes a commanding role in the reproduction of the system.
The U.S. capitalist system is indeed in its most advanced stage of imperialist development. Finance capital provides endless credit to all sectors of the economy and has profited immensely from speculation as productive investment becomes steadily more costly and saturated. Workers in the United States are burdened with a myriad of debts in the form of unpaid medical expenses, student loans, automobile leases, credit card bills, and mortgages. Imperialism has facilitated the growth of debt by expanding supply chains into every nook and cranny of the planet. This has not only worsened the condition of labor, but has also increased the cost of production in the aggregate and placed downward pressure on long-term profits, a trend also known as the rate of profit.
“Workers in the United States are burdened with a myriad of debts.”
Finance capitalists have responded to these contradictions by subsidizing massive short-term gains from speculative schemes, mergers, and cost-cutting austerity measures. The dominance of finance capital is therefore dependent upon the super exploitation of the working class around the world in low-wage production occurring anywhere from Alabama to Bangladesh. Surplus value extraction remains a central feature of capitalism regardless of how far the capitalist class has gone to obscure the social relations of the system. The theft of value from workers in all corners of the globe has led to obscene levels of inequality and rendered overproduction a permanent fixture of capitalism. Just five individuals possess more wealth than half of the world’s population. More than 100 million people have fallen into extreme poverty since the COVID-19 pandemic began more than one year ago.
The Biden administration’s inadequate stimulus packages and regulations fail to address the exploitation at the core of capitalism. It is thus unsurprising that a system which offers so little to so many has emphasized state repression and war as key mechanisms of social control. U.S capitalism is the undeniable leader in the war industry with no shortage of clientele. Trillions of U.S. dollars are spent on wars abroad to keep the resource-rich Global South disunited and China and Russia “contained.” The United States is also home to the most advanced surveillance system in the world and nearly a quarter of the world’s prisoners.
“The dominance of finance capital is dependent upon the super exploitation of the working class around the world.”
The war at home relegates a large section of Black America to a permanent “underclass” status and a larger portion of the population compliant with declining living standards. Endless war abroad keeps U.S. capital dominant in the global market. “Foreign adversaries” serve as scapegoats for merchants of death whose profits thrive from the manufactured consent developed in non-stop demonization campaigns against nations such as Cuba, Iran, and the DPRK to name just a few. None of this has changed in a fundamental way under Joe Biden’s regime. In fact, Biden’s policies coupled with the ideological return of “good capitalism” threaten to arrest the development of socialist and anti-imperialist political consciousness in the years to come.
A more “stable” ruling class provides no panacea from a world capitalist system seeking respite from an unprecedented moment of crisis. Capitalism is defined by exploitation. Its continued supremacy guarantees more violence, poverty, and environmental destruction, not less. The best hope for the class struggle in the United States is for emerging activists and organizers to engage in a serious study of capitalism; its history, how it works, and what the exploited and oppressed have done, and continue to do, to put an end to its tyranny.
Danny Haiphong is a contributing editor to Black Agenda Report and co-author of the book “American Exceptionalism and American Innocence: A People's History of Fake News- From the Revolutionary War to the War on Terror.” Follow his work on Twitter @SpiritofHo and on YouTube as co-host with Margaret Kimberley of Black Agenda Report Present's: The Left Lens. You can support Danny on Patreon by clicking this link
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