Greenland’s government bans oil drilling, leads indigenous resistance to extractive capitalism

Greenland’s government bans oil drilling, leads indigenous resistance to extractive capitalism

This story first appeared in Opendemocracy.

The young indigenous leadership of Múte Bourup Egede is battling for green sovereignty in a time of climate collapse.

By Adam Ramsay and Aaron White

In 2016, Greenland’s then minister responsible for economic development, Vittus Qujaukitsoq, welcomed the appointment of Rex Tillerson, the former CEO of Exxon Mobil, as US secretary of state. Despite representing the centre-Left party Siumut (Forward) and being surrounded by some of the most visible consequences of the warming world, Qujaukitsoq and his colleagues saw the growing potential for mining and drilling brought by the melting glaciers on the world’s biggest island as an opportunity to bring in the cash which would allow the long-desired independence from Denmark.

They aren’t alone. While the melting of Arctic ice is causing the world’s oceans to overflow and disrupting its weather systems, it has also unleashed a whole new geopolitical race. Earlier this year, the US Geological Survey estimated that the region’s rocks contain 13% of the world’s undiscovered oil, and 30% of undiscovered gas – carbon sinks which have been greedily eyed up by states and oil companies alike. And many of these reserves lie in the seas west of Greenland – where there are an estimated 17.5 billion undiscovered barrels of oil, enough to supply the whole planet for six months, at current usage rates.

And because the Arctic is the fastest warming part of the planet, the ice shielding these prehistoric deposits from prying drills is thinning, and disappearing, at an alarming rate.

But if some see this as an opportunity, others understand the absurdity of using climate change as a means to extract more fossil fuels and further change the climate. And this, alongside broader questions about mining, have shaped politics in the country this year.

In the spring, the governing Siumut party split, and its liberal coalition partners, the Democrats, resigned from the government, triggering a snap election in May.

The winner was the eco-socialist party Inuit Ataqatigiit. And in June, the new government banned all future oil and gas exploration from Greenland’s territory.

“The price of oil extraction is too high. This is based upon economic calculations, but considerations of the impact on climate and the environment also play a central role in the decision,” the government stated in July.

It’s not just oil and gas drilling that are contentious. When Donald Trump notoriously inquired about purchasing the island in 2019, he’d just had a briefing on its deposits of a number of minerals, many of which are likely to play a crucial role in the geopolitics of the coming decades. Among these are large quantities of uranium, and what are thought to be the world’s second biggest reserves of rare earth minerals – demand for which has soared in recent years because of their use in batteries for electric cars, computer chips and other tools of the high tech, low carbon economy.

Seen that way, Trump’s statement was probably less a random outburst and more a crude expression of the reality of Greenland’s role in the future of global geopolitics.

Biden, as ever, works in more subtle ways. In February, in discussion with tech giants like Alphabet (Google) and Facebook, he signed an executive order instigating a review of the supply chain of rare earth metals due to a global shortage and China’s dominance of the market. It seems implausible that the review won’t have produced significant discussion in US intelligence circles about the world’s largest deposits outside China, just a few hundred miles from Maine.

In March, the Polar Research and Policy Initiative expressed concerns about “the security implications of China’s near monopoly of rare earths and other minerals for the UK and its North American, European and Pacific allies”, especially given their significance to “strategically important sectors such as defence and security, green energy and technology”. The think tank called on the ‘five eyes’ intelligence alliance between the US, UK, Australia, New Zealand and Canada to team up with Greenland as part of a strategic resources partnership.

Greenland, says the website Mining Technology, “could be vital for tipping the scales in a trade war between global superpowers”.

In the midst of this global gallop for Greenland, with the world’s major powers, billionaire investors and intelligence agencies getting in on the act, the country has had some coverage in the global media of late.

What is often left out of the conversation, however, is the fascinating domestic dynamics among this Arctic island’s 57,000 people. Greenlanders’ struggle for sovereignty in the context of global capitalism, extractivism and climate collapse is an inspiring example of 21st-century indigenous resistance.

A young socialist indigenous climate leader

“There are two issues that have been important in this election campaign: people’s living conditions is one. And then there is our health and the environment,” Inuit Ataqatigiit leader Múte Bourup Egede told the Greenlandic public broadcaster KNR following his election victory in April.

Egede, 34, is the youngest prime minister Greenland’s had since it achieved a degree of home rule in the 1970s, and has led the democratic socialist and pro-independence party since 2018.

This [election] has sent shivers down the spine of many mining executives

In the recent election, the party, known as IA, centred its campaign on its opposition to an international mining project by Greenland Minerals, an Australian-based and Chinese-owned company that is seeking to extract uranium and neodymium from the Kvanefjeld mine in the south of the country. Neodymium is a crucial component of a broad range of technologies, from some kinds of wind turbine to electric cars, because it can be used to make small, lightweight, but powerful and permanent magnets, while uranium is used for both nuclear power and nuclear weapons.

“We must listen to the voters who are worried. We say no to uranium mining,” Egede told the KNR. His party also promised to ban all explorations of radioactive deposits, and, while it does not oppose the mining of rare earth minerals in principle, it insists it must be better regulated.

Egede and the IA won 37% of the vote, ending the tenure of Siumut, the party which had been in power for most of the time since 1979. Siumut was supportive of the Kvanefjeld mining project, assisting Greenland Minerals to gain preliminary approval and ending a previous zero tolerance policy for uranium mining.

There is now a bill being debated in the Greenland parliament to ban the uranium mining project and all mining that contains radioactive by-products.

According to Mark Nuttall, an anthropologist at the University of Alberta and the head of the Climate and Society research programme at the Greenland Climate Research Centre: “This [election] has sent shivers down the spine of many mining executives as to what kind of future mining would take place in Greenland.”

Under the direction of Egede, the IA-led government has also taken several significant steps in recent months to curb fossil fuel production.

Last week in Glasgow, Egede announced that Greenland will be joining the Paris Agreement. In 2016, under the leadership of Siumut, Greenland had invoked a territorial exemption to the climate agreement when Denmark joined.

Greenland, which is technically a self-governing territory of Denmark, claimed at the time that the country was dependent on its oil, gas and natural mineral reserves for its economy.

“The Arctic region is one of the areas on our planet where the effects of global warming are felt the most, and we believe that we must take responsibility collectively. That means that we, too, must contribute our share,” Egede said last week.

Egede’s government also pledged to develop its renewable energy capability, especially hydropower: “Greenland has hydropower resources that exceed our country’s needs. These large hydropower resources can be utilised in collaboration with national and international investors who need large amounts of cheap and renewable energy.”

The Northwest Passage

The rush for the rare earth minerals vital to so many low carbon technologies isn’t the only way that climate change is moving the country from the periphery of global geopolitics to its core. When the huge container ship the Ever Given blocked the Suez Canal in March, the world was reminded how much of its trade passes through its two major transcontinental waterways – Suez and Panama.

As much of the Arctic Ocean becomes ice-free for greater parts of the year, new potential trade routes open up, most significantly, the Northwest Passage across the top of North America, and the Northern Sea Route, above Eurasia.

The vast majority of Greenland’s settlements – including the capital, Nuuk – lie on the west coast of the country, along the Labrador Sea and Baffin Bay. When travelling from Asia or western North America to Europe or the east coast of North America through the Northwest Passage, this is the final stretch, positioning Nuuk as a potential hub on a future major shipping route.

The struggle for sovereignty

Nearly 90% of the population of Greenland are indigenous Inuit people, who have inhabited the island for thousands of years. Although they’ve been colonised for the last thousand years by Nordic powers, they have maintained their own language and culture.

Norsemen first settled on the island in the tenth century, and in 1261 Greenland formally became part of Norway. In 1814 Greenland became a Danish territory – and in 1953 the island became fully integrated into the Danish state. (During World War II, when Denmark was conquered by the Nazis, Greenland was de facto under US control.)

“The official Danish view was that Greenland was actually a dependency; it wasn’t a colony in the sense of its colonies in the West Indies and other places,” Nuttall explained. This, he said, was “because of this historic view that Greenland had long been part of this Nordic Commonwealth from the Norse settlements of the tenth century onwards”.

But the Inuit people don’t always see it that way. During the Black Lives Matter global movement in 2020, younger Greenlanders, including the 21-year-old hip hop artist Josef Tarrak-Petrussen, called for the removal of Danish colonial statues in Nuuk.

Denmark finally granted home rule in 1979. And in 2008 Greenland voted in favour of the Self-Government Act, which transferred more power to the island’s government – and effectively marked the beginning of state formation.

This self rule act recognises Greenland as a nation with the right to independence if it chooses it. Currently Greenland has nearly full sovereignty, with the exception of the areas of foreign policy and defence. The Arctic island currently receives an annual grant of around $585m from Denmark.

In recent years, questions around sovereignty have in many ways defined the political and environmental policies of the island. Many of the political parties support independence.

However, this financial dependence on Denmark makes the prospect of full independence quite difficult: the grant accounts for nearly 20% of the island’s income, while fishing makes up around 90% of its exports.

In order to gain full autonomy from Denmark, Greenland needs to develop a self-sufficient economy. However, this likely requires the development of lucrative extractive industries which will deepen the island’s dependence on (foreign) international capital.

“If we go back ten years, mining was seen as the major way to [become politically independent], and there was great excitement,” said Nuttall.

However in recent years this attitude towards mining has changed considerably due to a host of factors including a downturn in global commodity markets, a greater emphasis on renewable energy and attention given to the climate crisis.

“Mining is going to be one pillar of an economic development strategy that will include other things such as the development of tourism, expansion of the fishing industry… and expanding renewables,” Nuttall explained.

The current government is now focusing on investments in the island’s enormous hydropower potential, which has the potential to grow as glaciers melt and which will allow a reduction in petrol imports, one of the country’s main expenses. Kalistat Lund, the minister for agriculture, self-sufficiency, energy and environment, stated that the government is “working to attract new investments for the large hydropower potential that we cannot exploit ourselves”.

The island is also currently expanding its airports and promoting tourism. Currently the only flights available to Greenland are from Reykjavik or Copenhagen.

Greenland often appears in discussions about climate change – usually in the context of films of starving polar bears, adorable Arctic foxes and rutting muskox; or melting glaciers diverting the Gulf Stream and raising global sea levels, flooding cities across the planet. Ice cores from Greenland, like those of Antarctica, help us understand historic variations in the composition of our atmosphere and in our climate, and have been vital for scientists’ understanding of the science of climate change.

These things are all true, and each Arctic species being pushed to extinction by the warming of the world is a tragedy. But what’s also true is that Greenland is home to tens of thousands of people, with their own history and culture, politics and organisations; a people who, after a thousand years of colonisation, are starting to assert both their independence from Denmark and their sovereignty in the face of the global market. And, who, along with other indigenous communities around the world, are starting to lead a fightback against the industrial, extractive capitalism that’s killing the planet.

Capitalism and Reforms

Capitalism and Reforms

This post includes sections on: can capitalism be reformed, proposed reforms, do reforms protect capitalism, why reforms won’t work, and capitalism undoes reforms that benefit ordinary people.

This post is critical of reforms because they mostly protect capitalism in different ways and get in the way of building transformational mass movements. But I also do not completely discount them, as I think they might have a positive part to play in moving us towards ending capitalism.

This article is from the blog buildingarevolutionarymovement.

Can capitalism be reformed?

The obvious answer is no. But its more complicated than that. It depends what you mean by reform and timescales. If the question means can capitalism be reformed long term to meet the needs of ordinary people, then no way. If you mean when capitalism gets out of control can it be reformed so things are a bit less unequal to quieten demands for system change, then quite possibly, such as the 1930s in the US and the post-war decades in the UK.

Twenty-first-century capitalism may be less profitable but the corporate elite are clearly securing massive profits. These could be redistributed in workers wages, or from tax increases to fund a welfare state to meet everyone’s needs, unlike the substandard social safety net we currently have. I do think redistributive reforms are possible but it will require pressure from mass movements, which do not currently exist.

The Tory response to Covid could be seen as a reform and it certainly shows what’s possible. It contradicts the neoliberal claims that if we leave things to the free market and everything will be fine. I more see this as crisis response, with the Tories needing to balance the demands of the public to meet their basic needs and capitalists demands to keep the economy running. Extending the job retention or furlough scheme in the Spring and Winter was due to pressure from unions and business leaders, but there has not been a strong demand from the left. The question now is how will the government deficit be paid for – tax rises or more austerity. We’ve still not recovered from the last round of austerity by the coalition government following the 2008 financial crisis. Austerity now would continue the process of rolling back postwar gains related to benefits, more NHS privatisation and the welfare support for the most vulnerable (see the final section of the post for more on this).

Proposed reforms

Many reformist capitalists do not support the neoliberal form of capitalism – extreme inequality and corporate power – that we live under at the moment. They want a ‘fairer’ or ‘more equal’ form of capitalism. There are no shortage of proposals to reform capitalism, these include Robert Reich, David Korten, Thomas Piketty, Murray Edwards College, Cambridge University, Dominic Barton, the global managing director of McKinsey & Company, Ray Dalios, George Soros, Joseph Stiglitz.

Then there are different names for a better capitalism: decent capitalism, responsible capitalism, inclusive cap, stakeholder cap, ethical capitalism, conscious capitalism, Economic Dignity, Common-Good Capitalism.

In the UK, Ed Miliband when he was the leader of the Labour Party (2010-2015) wanted to introduce a proper industrial strategy to introduce national and regional investment and to bring in controls over the excesses of corporate behaviour. The Corbyn project presented itself as democratic socialist but due to the limits of global neoliberalism, could have only moved us towards social democracy. The current Tory government are looking to copy past Labour Party policies with their ‘levelling up’ rhetoric, although it seems unlikely they will follow through.

The UK left-leaning think tank Institute for Public Policy Research came out with its 10 point plan for a better Britain in 2018: Reshaping the economy, Securing good pay and good jobs, Improving the private sector, promoting competition and protecting consumers, Increasing public investment, Strengthening the financial system, Tackling wealth inequality, Fair and simple taxes, Environmental sustainability, Devolution. It’s likely that Theresa May when Prime Minister was sympathetic to some of these ideas.

Do reforms protect capitalism?

Mostly yes. Many on the radical left argue that fighting for reforms maintains capitalism by making it more stable or profitable.

Nate Hawthorne has a more nuanced understanding. He describes in this post that reforms help capitalism function, he gives the example of extending credit to companies so they can operate. This could be broadened to include all the things that governments do that make the economy and business environment easier for companies to operate in and make profits.

Nate also describes the importance of the spreading of ‘capitalists class consciousness’ to ensure capitalist system stability. Capitalists will have ‘boss-consciousness’ related to their employees in their business but some will be more focused on increasing their personal wealth over the long term interests of the capitalists class. Reforms can limit the excesses of some self-serving capitalists. This is called the ‘corporate compromise’ by Young et al in Levers of Power: How the 1% Rules and What the 99% Can Do About It. The book describes how the creation of US legislation goes through a process of being generally agreeable to difference corporate interests to ensure the stability of capitalism [1]. It describes how Barak Obama worked very hard to keep the capitalist system stable so it worked for the business world as a whole [2]. And that Donald Trump violated the corporate compromise because he advanced certain business interests over others [3].

Reforms also prevent social unrest by doing just enough to stop it from boiling over. This relates to movements, campaigns, street protests, demonstrations and riots. Examples of this would be the US civil rights laws in the 1960s or the poll tax riots in 1990 in the UK.

Reforms have also saved capitalism from revolution by giving mass movements what they demand to quiet them down. The example here would be the New Deal in the US in the 1930s following a mass movements of trade unions, socialists and communists. [4]

As well as reforms protecting capitalism from itself, greedy capitalists or mass movements, reforms are also used to protect capitalisms profits in the form of anti-trade union laws. (for more information on this see a summary in the final section of this post).

Following the Wall Street Crash of 1929 and the Great Depression in the 1930s, several factors combined to saved capitalism: Keynesian economic theory; mass movements demanding state support and welfare reform; and the economic stimulation generated during the war and the rebuilding after. Richard Wolff asks an important question: has the systematic crushing of the left over the last forty years taken away one of the important mechanisms for protecting capitalism? [5]

Why reforms won’t work

There are several ways to think about this. First, if reforms are achieved that benefit ordinary people but you leave the capitalists in power, they will always undo or roll back any gains for ordinary people (see the next section for more details). The capitalists can’t help themselves. So reform is not enough and we need to end capitalism. [6]

Second, the mid-twentieth century reforms were achieved because of a combination of rebuilding after the war resulting in a high demand for labour, powerful working-class movements, the increasing profitability of capitalism with capitalist classes willing to share some of their profits, and British capital could not move abroad as it does now so had nowhere else to go. There is also an argument that the threat of communism from the Soviet Union put pressure on western elites and states. [7]

Third, currently, the left is so weak and corporate power so dominant that we’re not winning any reforms. This is the ‘structural power’ argument. [8]

Fourth, some on the left advocate a gradualist strategy through reforms to ending capitalism and creating a socialist society. There is a lot to unpack in future posts on this point but I do think that a rupture with capitalism will be required, a revolution.

Capitalism undoes reforms that benefit ordinary people

Since the 1980s the current form of capitalism, neoliberalism has been rolling back the gain that ordinary people made through the 20th century. Using the four categories from the previous post on these gains I will briefly describe how they have been undone.

First, what is privatisation? It is the selling off of publicly owned services, industries and institutions so they become privately owned and run. In the UK it started with the steel industry in the 1950s, then in the 1980s, Thatcher sold off a large number of public institutions, industries and services. Council housing was sold off in the 1980s through the right to buy scheme. The public services campaign group We Own It gives a great history of the privatisation of different publicly owned services, industries and institutions in Britain.

Parliamentary reform

Paul Foot in The Vote: How it was won and it was undermined, provides an excellent history of success of electoral reform up to the early 20th century. And then how it was undermined for the rest of the century. The continuing struggle for electoral reform is ongoing and important to weaken the Tories and open things up for the radical left.

Worker’s Rights

See a summary of the UK government anti-trade union legislation from 1980-1999 here and from 1979-2010 here. Since 2010 there has been the Trade Union Act 2016 [9], and then further restrictions since that act during related Covid.


Stephen Ball in The Education Debate describes how since the 1980s schools have been remodelled on commercial and industrial institutions. He argues that neoliberalism has changed the British education system through four key mechanisms: top-down performance management, greater competitiveness and contestability, choice and voice, measures to strengthen the capability of public servants to deliver improved public services. Here is a summary by Ball of neoliberal education policy in Britain from 1979-2010 under the Tory’s and New Labour. And here is the We Own It perspective on Academy schools.

Social Welfare

The most recent reform of the welfare system was The Welfare Reform and Work Act 2016. A 2019 report by Frank Field MP, Heidi Allen MP and Feeding Britain called The ‘Other Britain’ and the failure of the welfare state, found that the welfare system is failing the most vulnerable. They list the key issues to be:

  • benefit freeze – claimants no longer get an annual increase in line with inflation so have less and less to live on
  • Universal Credit, issues include 5-week wait and advance payments, third party deductions and old social loans, sanctions, Work Capability Assessments
  • Medical assessments and Personal Independence Payments (PIP)
  • No recourse to public funds for migrants
  • Jobcentres are unsupportive and uncaring
  • The gig economy and the working poor cannot afford to cover their outgoing so need food banks
  • Problem Debt due to low pay force people into high-cost debt

The increasing use of food banks in the UK is another clear indication that the welfare state is failing: “In 2019/20 approximately 1.9 million people used a food bank in the United Kingdom, around 300 thousand more than the previous year.” [10]

The NHS is a key institution of Britain’s welfare state. We Own It has identified three ways the NHS is being undermined:

  • creating competition so private companies provide services funded by taxpayers;
  • the reorganisation of the NHS so regional commissioning groups allow local NHS service contracts to be managed by private companies;
  • the Tory governments have reduced the level of funding, which could make people think a publicly owned NHS isn’t working and so the private sector might be seen as a solution.


  1. Levers of Power: How the 1% Rules and What the 99% Can Do About It, Kevin A. Young, Tarun Banerjee and Michael Schwartz, 2020, chapter 2
  2. Levers of Power, page 131
  3. Levers of Power, page 133
  4. and
  5. Crisis and Openings: Introduction to Marxism – Richard D Wolff, 130 min,
  6. AskProfWolff: A Critique of Robert Reich, 4 min; Understanding Marxism: Q&A with Richard D. Wolff, 35 min; How Reaganomics Killed America’s Middle Class, 54 min; Crisis and Openings: Introduction to Marxism – Richard D Wolff, 129 min,
  7. see conclusion of Also
  8. Levers of Power: How the 1% Rules and What the 99% Can Do About It, Kevin A. Young, Tarun Banerjee and Michael Schwartz, 2020
  9. and
Capitalism’s cycles and waves

Capitalism’s cycles and waves

This article is from the blog buildingarevolutionarymovement.

This post will look at the long-term cycles of the geographical centre of the capitalist economy (during capitalisms existence over the last 600 years), capitalism’s economic waves and cycles and the 10-year capitalist business cycle.

There are several theories of historical cycles that relate to societies or civilisations, these are beyond the scope of this post

Understanding capitalism’s cycles and waves are important to understanding capitalism better to be able to beat it. Also, there looks to be a relationship between capitalism’s cycles and waves, and cycles of worker and social movement expansion, and also related to the gains and concessions these movements get from capitalists.

Long-term cycles of the geographic centre of the capitalist economy

This builds on the phases of capitalism described in a previous post: Mercantile Capitalism, 14th-18th centuries; Classical/Industrial Capitalism, 19th century; Keynesianism or New Deal Capitalism, 20th century; and Finance Capitalism/Neoliberalism, late 20th century.

These ideas were likely first developed by Fernand Braudel, who described the movement of centres of capitalism, initially cities then nation-states. Braudel described them starting in Venice from 1250-1510, then Antwerp from 1500-1569, Genoa from 1557-1627, Amsterdam from 1627-1733, and London/England 1733-1896.

Immanuel Wallerstein describes as part of his ‘world-system theory’ that there have been three countries that have dominated the world system: the Netherlands in the 17th century, Britain in the 19th century and the US after World War I.

Giovanni Arrighi identifies four ‘systemic cycles of accumulation’ in his book The Long Twentieth Century. He describes a ‘structuralist model’ of capitalist world-system development over the last 600 years of four ‘long centuries’, with a different economic centre. Arrighi’s systemic cycles of accumulation were centred around: the Italian city-states in the 16th century, the Netherlands in the 17th century, Britain in the 19th century and the United States after 1945. [1] It looks like the centre is moving Eastwards in the twenty-first century. [2]

George Modelski identified long cycles that connect war cycles, economic dominance, and the political aspects of world leadership, in his 1987 book Long Cycles in World Politics. He argues that war and other destabilising events are a normal part of long cycles. Modelski describes several long cycles since 1500, each lasting from 87 to 122 years: starting with Portugal in the 16th century, the Netherlands in the 17th century, Britain in the 18th and 19th century and the US since 1945.

Capitalism’s economic waves and cycles

Several waves and cycles have been identified in the capitalist economy that relate to periods of economic growth and decline.

Kondratiev waves (also known as Kondratieff waves or K-waves) are 40 to 60-year cycles of capitalism’s economic growth and decline. This is a controversial theory and most academic economists do not recognise it. But then most academic economists think that capitalism is a good idea!

Kondratiev/Kondratieff identified the first wave starting with the factory system in Britain in the 1780s, ending about 1849. The second wave starts in 1849, connected to the global development of the telegraph, steamships and railways. The second waves’ downward phase starts about 1873 and ends in the 1890s. In the 1920s, he believed a third wave was taking place, that had already reached its peak and started its downswing between 1914 and 1920. He predicted a small recovery before a depression a few years later. This was an accurate prediction. [3]

Paul Mason in Postcapitalism: A Guide to Our Future describes the phases of the K-waves:

“The first, up, phase typically begins with a frenetic decade of expansion, accompanied by wars and revolutions, in which new technologies that were invented in the previous downturn are suddenly standardized and rolled out. Next, a slowdown begins, caused by the reduction of capital investment, the rise of savings and the hoarding of capital by banks and industry; it is made worse by the destructive impact of wars and the growth of non-productive military expenditure.

“However, this slowdown is still part of the up phase: recessions remain short and shallow, while growth periods are frequent and strong.

Finally, a down phase starts, in which commodity prices and interest rates on capital both fall. There is more capital accumulated than can be invested in productive industries, so it tends to get stored inside the finance sector, depressing interest rates because the ample supply of credit depresses the price of borrowing. Recessions get worse and become more frequent. Wages and prices collapse, and finally a depression sets in.

In all this, there is no claim as to the exact timing of events, and no claim that the waves are regular.” [4]

Mason describes his theory of a fourth wave starting in 1945 and peaking in 1973 when oil-exporting Arab countries introduced an oil embargo on the USA and reduced oil output. The global oil price quadrupled, resulting in several nations going into recession. Mason argues that the fourth wave did not end but was extended and is still ongoing. The downswing of the previous three cycles ended by capitalists innovating their way out of the crisis using technology. This was not the case in the current fourth cycle because the defeat of organised labour (trade unions) by neoliberal governments in the 1980s, has resulted in little or no wage growth and atomization of the working class. [5]

In On New Terrain: How Capital is Reshaping the Battleground of Class War Kim Moody used data from three sources (Mandel, Kelly, Shaikh) to identify his theory of a third (1893-1945), fourth (1945-1982) and fifth (1982-present) long waves. The third upswing from 1893-1914, then downswings from 1914-1940. The fourth upswing from 1945-1975, downswings from 1975-1982. The fifth upswing from 1982-2007, downswings from 2007-?. [6]

Joseph Schumpeter identified several smaller cycles have been combined to form a ‘composite waveform’ that sit under the K-waves.

The Kuznets swing is a 15-25 year cycle related to infrastructure investment, construction, land and property values.

The Juglar cycle is a 7-11 year cycle related to the fluctuations in the investment in fixed capital. Fixed capital are real, physical things used in the production of goods, such as buildings or machinery.

The Kitchin cycle is a 3-5 year cycle caused by the delay it takes the management of businesses to decide to increase or decrease the production of goods based on information from the marketplaces where they sell their goods.

Business cycle

This is the roughly 10-year boom and slump cycle of the global capitalist economy. It is also known as the (economic cycle, boom-slump cycle, industrial cycle). Mainstream economics view shocks to the economy as random and therefore not cycles. There are several theories of what causes business cycles and economic crises that I will look at in a future post. Theories about the business cycle have been developed by Karl MarxClément JuglarKnut WicksellJoseph SchumpeterMichał KaleckiJohn Maynard KeynesSchumpeter identified four stages of the business cycle: expansion crisis, recession, recovery.

So what are the dates of the business cycle? I’ll go through the information on business cycles in the US and UK since 1945 and there is no clear agreement on the number. Something to come back to.

Howard J. Sherman in The Business Cycle Growth and Crisis under Capitalism argues that the best dates are those provided by the US National Bureau of Economic Research (NBER). He explains that they’re not ideal but the best available and they go back a long way. Since 1945, the US has had recession in the years 1949, 1954, 1958, 1961, 1970, 1975, 1980, 1982, 1991, 2001, 2009. That is ten business cycles, eleven if you include the one that started in the last ten years. The Economic Cycle Research Institute (ECRI) uses these dates as well.

Sam Williams at the blog Critique of Crisis Theory is critical of the NBER dates and argues that there have only been five business cycles since 1945. He measures them based on the point they peaked rather than a recession: 1948-1957, 1957-1968, 1982-1990, 1990-2000, 2000-2007. He describes the period from 1968-1982 as one long crisis. A sixth business cycle could be added from 2007-2020.

D fisher identified 9 cycles from 1945-1991.

For the UK, I found three different sets of information of when the business cycles have been. Each indicates a different number of business cycles since 1945.

The National Institute of Economic and Social Research list UK business cycles since 1945 as peak 1951, trough 1952; peak 1955, trough 1958; peak 1961, trough 1963; peak 1964, trough 1967; peak 1968, trough 1971, peak 1973, trough 1975; peak 1979, trough 1982; peak 1984, trough 1984; peak 1988, trough 1992. So that’s nine business cycles from 1945-1992.

The Economic Cycle Research Institute (ECRI) identifies UK business cycles since 1945 to be: trough 1952; peak 1974, trough 1975; peak 1979, trough 1981; peak 1990, trough 1992; peak 2008, trough 2010. The ECRI chart does not list anything for the current crisis but I think it it’s safe to assume that 2020 was the peak. That is five business cycles from 1945-2020.

Wikipedia lists recession in the UK since 1945 taking place in: 1956, 1961, 1973, 1975, 1980-1, 1990-1, 2008-9 and 2020-? That is seven business cycles from 1945-2020.


  1. Giovanni Arrighi: Systemic Cycles of Accumulation, Hegemonic Transitions, and the Rise of China, William I. Robinson, 2011, page 6/7,
  2. Giovanni Arrighi: Systemic Cycles of Accumulation, Hegemonic Transitions, and the Rise of China, page 10
  3. Postcapitalism: A Guide to Our Future, Paul Mason, 2015, page 35/6
  4. Postcapitalism: A Guide to Our Future, page 36
  5. Postcapitalism: A Guide to Our Future, CH4
  6. On New Terrain: How Capital is Reshaping the Battleground of Class War, Kim Moody, 2018, page 72
Robbing the Soil, 1: Commons and classes before capitalism

Robbing the Soil, 1: Commons and classes before capitalism

This article originally appeared in Climate & Capitalism.
Featured image: Harvesting grain in the 1400s

Editor’s note: We are no Marxists, but we find it important to look at history from the perspective of the usual people, the peasants, and the poor, since liberal historians tend to follow the narrative of endless progress and neglect all the violence and injustice this “progress” was and is based on. Garrett Hardin’s annoying but very influential essay “The Tragedy of the Commons” is a good example, and we are thankful to the author for debunking it.

“All progress in capitalist agriculture is a progress in the art, not only of robbing the worker, but of robbing the soil.” (Karl Marx)

Articles in this series:

Commons and classes before capitalism
‘Systematic theft of communal property’
Against Enclosure: The Commonwealth Men
Dispossessed: Origins of the Working Class
Against Enclosure: The Commoners Fight Back

by Ian Angus

To live, humans must eat, and more than 90% of our food comes directly or indirectly from soil. As philosopher Wendell Berry says, “The soil is the great connector of lives…. Without proper care for it we can have no community, because without proper care for it we can have no life.”[1]

Preventing soil degradation and preserving soil fertility ought to be a global priority, but it isn’t. According to the United Nations, a third of the world’s land is now severely degraded, and we lose 24 billion tonnes of fertile soil every year. More than 1.3 billion people depend on food from degraded or degrading agricultural land.[2] Even in the richest countries, almost all food production depends on massive applications of synthetic fertilizers and pesticides that further degrade the soil and poison the environment.

In Karl Marx’s words, “a rational agriculture is incompatible with the capitalist system.”[3] To understand why that is, we need to understand how capitalist agriculture emerged from a very different system.


For almost all of human history, almost all of us lived and worked on the land. Today, most of us live in cities.

It is hard to overstate how radical that change is, or how quickly it happened. Two hundred years ago, 90% of the world’s population was rural. Britain became the world’s first majority-urban country in 1851. As recently as 1960, two-thirds of the world’s people still lived in rural areas. Now it’s less than half, and only half of those are farmers.

Between the decline of feudalism and the rise of industrial capitalism, rural society was transformed by the complex of processes that are collectively known as enclosure. The separation of most people from the land, and the concentration of land ownership in the hands of a tiny minority, were revolutionary changes in the ways that humans lived and work. It happened in different ways and at different times in different parts of the world, and is still going on today.

Our starting point is England, where what Marx labelled “so-called primitive accumulation” first occurred.

Common Fields, Common Rights

In medieval and early-modern England, most people were poor, but they were also self-provisioning — they obtained their essential needs directly from the land, which was a common resource, not private property as we understand the concept.

No one actually knows when or how English common farming systems began. Most likely they were brought to England by Anglo-Saxon settlers after Roman rule ended. What we know for sure is that common field agriculture was widespread, in various forms, when English feudalism was at its peak in the twelfth and thirteenth centuries.

The land itself was held by landlords, directly or indirectly from the king. A minor gentry family might hold and live on just one manor — roughly equivalent to a township — while a top aristocrat, bishop or monastery could hold dozens. The people who actually worked the land, often including a mix of unfree serfs and free peasants, paid rent and other fees in labor, produce or (later) cash, and had, in addition to the use of arable land, a variety of legal and traditional rights to use the manor’s resources, such as  grazing animals on common pasture, gathering firewood, berries and nuts in the manor forest, and collecting (gleaning) grain that remained in the fields after harvest.

“Common rights were managed, divided, and redivided by the communities. These rights were predicated on maintaining relations and activities that contributed to the collective reproduction. No feudal lord had rights to the land exclusive of such customary rights of the commoners. Nor did they have the right to seize or engross the common fields as their own domain.”[4]

Field systems varied a great deal, but usually a manor or township included both the landlord’s farm (demesne) and land that was farmed by tenants who had life-long rights to use it. Most accounts only discuss open field systems, in which each tenant cultivated multiple strips of land that were scattered through the arable fields so no one family had all the best soil, but there were other arrangements. In parts of southwestern England and Scotland, for example, farms on common arable land were often compact, not in strips, and were periodically redistributed among members of the commons community. This was called runrig; a similar arrangement in Ireland was called rundale.

Most manors also had shared pasture for feeding cattle, sheep and other animals, and in some cases forest, wetlands and waterways.

Though cooperative, these were not communities of equals. Originally, all of the holdings may have been about the same size but in time considerable economic differentiation took place.[5] A few well-to-do tenants held land that produced enough to sell in local markets; others (probably a majority in most villages) had enough land to sustain their families with a small surplus in good years; others with much less land probably worked part-time for their better-off neighbors or for the landlord. “We can see this stratification right across the English counties in Domesday Book of 1086, where at least one-third of the peasant population were smallholders. By the end of the thirteenth century this proportion, in parts of southeastern England, was over a half.”[6]

As Marxist historian Rodney Hilton explains, the economic differences among medieval peasants were not yet class differences. “Poor smallholders and richer peasants were, in spite of the differences in their incomes, still part of the same social group, with a similar style of life, and differed from one to the other in the abundance rather than the quality of their possessions.”[7] It wasn’t until after the dissolution of feudalism in the fifteenth century that a layer of capitalist farmers developed.


If we were to believe an influential article published in 1968, commons-based agriculture ought to have disappeared shortly after it was born. In “The Tragedy of the Commons,” Garrett Hardin argued that commoners would inevitably overuse resources, causing ecological collapse. In particular, in order to maximize his income, “each herdsman will try to keep as many cattle as possible on the commons,” until overgrazing destroys the pasture, and it supports no animals at all. “Freedom in a commons brings ruin to all.”[8]

Since its publication in 1968, Hardin’s account has been widely adopted by academics and policy makers, and used to justify stealing indigenous peoples’ lands, privatizing health care and other social services, giving corporations ‘tradable permits’ to pollute the air and water, and more. Remarkably, few of those who have accepted Hardin’s views as authoritative notice that he provided no evidence to support his sweeping conclusions. He claimed that “tragedy” was inevitable, but he didn’t show that it had happened even once.[9]

Scholars who have actually studied commons-based agriculture have drawn very different conclusions. “What existed in fact was not a ‘tragedy of the commons’ but rather a triumph: that for hundreds of years — and perhaps thousands, although written records do not exist to prove the longer era — land was managed successfully by communities.”[10]

The most important account of how common-field agriculture in England actually worked is Jeanette Neeson’s award-winning book, Commoners: Common Right, Enclosure and Social Change in England, 1700-1820. Her study of surviving manorial records from the 1700s showed that the common-field villagers, who met two or three times a year to decide matters of common interest, were fully aware of the need to regulate the metabolism between livestock, crops and soil.

“The effective regulation of common pasture was as significant for productivity levels as the introduction of fodder crops and the turning of tilled land back to pasture, perhaps more significant. Careful control allowed livestock numbers to grow, and, with them, the production of manure. … Field orders make it very clear that common-field villagers tried both to maintain the value of common of pasture and also to feed the land.”[11]

Village meetings selected “juries” of experienced farmers to investigate problems, and introduce permanent or temporary by-laws. Particular attention was paid to “stints” — limits on the number of animals allowed on the pasture, waste, and other common land. “Introducing a stint protected the common by ensuring that it remained large enough to accommodate the number of beasts the tenants were entitled to. It also protected lesser commoners from the commercial activities of graziers and butchers.”[12]

Juries also set rules for moving sheep around to ensure even distribution of manure, and organized the planting of turnips and other fodder plants in fallow fields, so that more animals could be fed and more manure produced. The jury in one of the manors that Neeson studied allowed tenants to pasture additional sheep if they sowed clover on their arable land — long before scientists discovered nitrogen and nitrogen-fixing, these farmers knew that clover enriched the soil.[13]

And, given present-day concerns about the spread of disease in large animal feeding facilities, it is instructive to learn that eighteenth century commoners adopted regulations to isolate sick animals, stop hogs from fouling horse ponds, and prevent outside horses and cows from mixing with the villagers’ herds. There were also strict controls on when bulls and rams could enter the commons for breeding, and juries “carefully regulated or forbade entry to the commons of inferior animals capable of inseminating sheep, cows or horses.”[14]

Neeson concludes, “the common-field system was an effective, flexible and proven way to organize village agriculture. The common pastures were well governed, the value of a common right was well maintained.”[15]

Commons-based agriculture survived for centuries precisely because it was organized and managed democratically by people who were intimately involved with the land, the crops and the community. Although it was not an egalitarian society, in some ways it prefigured what Karl Marx, referring to a socialist future, described as “the associated producers, govern[ing] the human metabolism with nature in a rational way.”[16]

Class Struggles

That’s not to say that agrarian society was tension free. There were almost constant struggles over how the wealth that peasants produced was distributed in the social hierarchy. The nobility and other landlords sought higher rents, lower taxes and limits on the king’s powers, while peasants resisted landlord encroachments on their rights, and fought for lower rents. Most such conflicts were resolved by negotiation or appeals to courts, but some led to pitched battles, as they did in 1215 when the barons forced King John to sign Magna Carta, and in 1381 when thousands of peasants marched on London to demand an end to serfdom and the execution of unpopular officials.

Historians have long debated the causes of feudalism’s decline: I won’t attempt to resolve or even summarize those complex discussions here.[17] Suffice it to say that by the early 1400s in England, the feudal aristocracy was much weakened. Peasant resistance had effectively ended hereditary serfdom and forced landlords to replace labor-service with fixed rents, while leaving common field agriculture and many common rights in place. Marx described the 1400s and early 1500s, when peasants in England were winning greater freedom and lower rents, as “a golden age for labor in the process of becoming emancipated.”[18]

But that was also a period when longstanding economic divisions within the peasantry were increasing. W.G. Hoskins described the process in his classic history of life in a Midland village.

“During the fifteenth and sixteenth centuries there emerged at Wigston what may be called a peasant aristocracy, or, if this is too strong a phrase as yet, a class of capitalist peasants who owned substantially larger farms and capital resources than the general run of village farmers. This process was going on all over the Midlands during these years …”[19]

Capitalist peasants were a small minority. Agricultural historian Mark Overton estimates that “in the early sixteenth century, around 80 per cent of farmers were only growing enough food for the needs of their family household.” Of the remaining 20%, only a few were actual capitalists who employed laborers and accumulated ever more land and wealth. Nevertheless, by the 1500s two very different approaches to the land co-existed in many commons communities.

“The attitudes and behavior of farmers producing exclusively for their own needs were very different from those farmers trying to make a profit. They valued their produce in terms of what use it was to them rather than for its value for exchange in the market. … Larger, profit orientated, farmers were still constrained by soils and climate, and by local customs and traditions, but also had an eye to the market as to which crop and livestock combinations would make them most money.”[20]

As we’ll see, that division eventually led to the overthrow of the commons.

Primitive Accumulation

For Marx, the key to understanding the long transition from agrarian feudalism to industrial capitalism was “the process which divorces the worker from the ownership of the conditions of his own labor,” which itself involved “two transformations … the social means of subsistence and production are turned into capital, and the immediate producers are turned into wage-laborers.”[21]

“Nature does not produce on the one hand owners of money or commodities, and on the other hand men possessing nothing but their own labor-power. This relation has no basis in natural history, nor does it have a social basis common to all periods of human history. It is clearly the result of a past historical development, the product of many economic revolutions, of the extinction of a whole series of older formations of social production.”[22]

A decade before Capital was published, Marx summarized that historical development in an early draft.

“It is … precisely in the development of landed property that the gradual victory and formation of capital can be studied. … The history of landed property, which would demonstrate the gradual transformation of the feudal landlord into the landowner, of the hereditary, semi-tributary and often unfree tenant for life into the modern farmer, and of the resident serfs, bondsmen and villeins who belonged to the property into agricultural day laborers, would indeed be the history of the formation of modern capital.”[23]

In Section VIII of Capital Volume 1, titled “The So-Called Primitive Accumulation of Capital,” he expanded that paragraph into a powerful and moving account of the historical process by which the dispossession of peasants created the working class, while the land they had worked for millennia became the capitalist wealth that exploited them. It is the most explicitly historical part of Capital, and by far the most readable. No one before Marx had researched the subject so thoroughly — Harry Magdoff once commented that on re-reading it, he was immediately impressed by the depth of Marx’s scholarship, by “the amount of sheer digging, hard work, and enormous energy in the accumulated facts that show up in his sentences.”[24]

Since Marx wrote Capital, historians have published a vast amount of research on the history of English agriculture and land tenure — so much that a few decades ago, it was fashionable for academic historians to claim that Marx got it all wrong, that the privatization of common land was a beneficial process for all concerned. That view has little support today. Of course it would be very surprising if subsequent research didn’t contradict Marx in some ways, but while his account requires some modification, especially in regard to regional differences and the tempo of change, Marx’s history and analysis of the commons remains essential reading.[25]


The next installments in this series will discuss how, in two great waves of social change, landlords and capitalist farmers “conquered the field for capitalist agriculture, incorporated the soil into capital, and created for the urban industries the necessary supplies of free and rightless proletarians.”[26]

To be continued ….

[1] Wendell Berry, Wendell Berry: Essays 1969-1990, ed. Jack Shoemaker (Library of America, 2019), 317.


[3] Karl Marx, Capital: A Critique of Political Economy, trans. David Fernbach, vol. 3, (Penguin Books, 1981), 216

[4] John Bellamy Foster, Brett Clark, and Hannah Holleman, “Marx and the Commons,” Social Research (Spring 2021), 2-3.

[5] See “Reasons for Inequality Among Medieval Peasants,” in Rodney Hilton, Class Conflict and the Crisis of Feudalism: Essays in Medieval Social History (Hambledon Press, 1985), 139-151.

[6] Rodney Hilton, Bond Men Made Free: Medieval Peasant Movements and the English Rising of 1381 (Routledge, 2003 [1973]), 32.

[7] Rodney Hilton, Bond Men Made Free, 34.

[8] Garrett Hardin, The Tragedy of the CommonsScience, December 13, 1968.

[9] Ian Angus, The Myth of the Tragedy of the CommonsClimate & Capitalism, August 25, 2008; Ian Angus, Once Again: ‘The Myth of the Tragedy of the Commons’Climate & Capitalism, November 3, 2008.

[10] Susan Jane Buck Cox, No Tragedy of the CommonsEnvironmental Ethics 7, no. 1 (1985), 60.

[11] J. M. Neeson, Commoners: Common Right, Enclosure and Social Change in England, 1700-1820 (Cambridge University Press, 1993), 113.

[12] J. M. Neeson, Commoners, 117.

[13] J. M. Neeson, Commoners, 118-20.

[14] J. M. Neeson, Commoners, 132.

[15] J. M. Neeson, Commoners, 157.

[16] Karl Marx, Capital Volume 3, trans. David Fernbach, (Penguin Books, 1981), 959.

[17] For an insightful summary and critique of the major positions in those debates, see Henry Heller, The Birth of Capitalism: A Twenty-First Century Perspective (Pluto Press, 2011).

[18] Karl Marx, Grundrissetrans. Martin Nicolaus (Penguin Books, 1973), 510.

[19] W. G. Hoskins, The Midland Peasant: The Economic and Social History of a Leicestershire Village (Macmillan., 1965), 141.

[20] Mark Overton, Agricultural Revolution in England: The Transformation of the Agrarian Economy, 1500-1850 (Cambridge University Press, 1996), 8, 21.

[21] Karl Marx, Capital Volume, 1, 874.

[22] Karl Marx, Capital Volume 1, 273.

[23] Karl Marx, Grundrisse, 252-3.

[24] Harry Magdoff, “Primitive Accumulation and Imperialism,” Monthly Review (October 2013), 14.

[25] “The So-Called Primitive Accumulation” — Chapters 26 through 33 of Capital Volume 1 — can be read on the Marxist Internet Archive, beginning here. The somewhat better translation by Ben Fowkes occupies pages 873 to 940 of the Penguin edition.

[26] Karl Marx, Capital Volume 1895.

The Myths of Capitalism

The Myths of Capitalism

This article is from the blog buildingarevolutionarymovement.

This post lists and challenges, debunks, pulls apart the following myths of capitalism:

  • there is no alternative to capitalism
  • capitalism is the only system that provides individual and economic freedom
  • everything is better under capitalism
  • as capitalism increases the size of the economy, everyone benefits
  • free-market capitalism is the best way to run the global economy
  • capitalist economic theory is the best
  • capitalism maintains low taxes, which is good for workers and businesses
  • capitalism promotes equality, work hard and you’ll get rich
  • capitalism fits well with human nature
  • capitalism and democracy work well together
  • capitalism gradually balances differences across countries through free markets and free trade.

There is a liberal capitalist myth about progress. A determinist (set path forwards) view that things will continue to get better. I completely disagree with this perspective and it is clearly wrong if you look at history, esp the last 40 years. I will describe and challenge this myth in a future post.

I would like to start with a quote from 23 Things They Dont Tell You About Capitalism by Ha-Joon Chang:

“Most countries have introduced free-market policies over the last three decades – privatization of state-owned industrial and financial firms, deregulation of finance and industry, liberalization of international trade and investment, and reduction in income taxes and welfare payments. These policies, their advocates admitted, may temporarily create some problems, such as rising inequality, but ultimately they will make everyone better off by creating a more dynamic and wealthier society. The rising tide lifts all boats together, was the metaphor.

The result of these policies has been the polar opposite of what was promised. Forget for a moment the financial meltdown, which will scar the world for decades to come. Prior to that, and unbeknown to most people, free-market policies had resulted in slower growth, rising inequality and heightened instability in most countries. In many rich countries, these problems were masked by huge credit expansion; thus the fact that US wages had remained stagnant and working hours increased since the 1970s was conveniently fogged over by the heady brew of credit-fuelled consumer boom. The problems were bad enough in the rich countries, but they were even more serious for the developing world. Living standards in Sub-Saharan Africa have stagnated for the last three decades, while Latin America has seen its per capita growth rate fall by two-thirds during the period. There were some developing countries that grew fast (although with rapidly rising inequality) during this period, such as China and India, but these are precisely the countries that, while partially liberalizing, have refused to introduce full-blown free-market policies.

Thus, what we were told by the free-marketeers – or, as they are often called, neo-liberal economists – was at best only partially true and at worst plain wrong…the ‘truths’ peddled by free-market ideologues are based on lazy assumptions and blinkered visions, if not necessarily self-serving notions.”[1]

Myth – there is no alternative to capitalism

The argument goes that there is no viable alternative economic system. Centrally controlled governments have been tried and failed. Capitalism isn’t perfect but it’s all we’ve got. [2]

Simplistically this is an argument against planned economies which I will deal with in the free market capitalism section below. The main two examples of communist planned economies are the Soviet Union and the People’s Republic of China. There are many different forms of communism and these are authoritarian examples. They only came to exist and survive in the violent 20th century because they had strong leadership and then used military force to defend themselves against capitalist nations that attempted to destroy them. There is of course more to their survival than this but that is for another post. I’m not in the slightest defending the horrific violence they directed to their citizens. Critics of these experiments do not acknowledge all the positive things that we can learn from the Soviet Union – self-management, collectivisation, new housing processes, increases in literacy. [3]

What I want to focus on here is that if capitalism is genuinely the only naturally existing economic system, then why do capitalists have to constantly crush any alternatives. Because, capitalists see these embryonic alternatives as a threat to their wealth, dominance and control. This is done either through extreme media manipulation and propaganda or with violence and killings. This post gives three examples of capitalists crushing alternatives: the Copenhagen squatting movement, New Age Travellers in the UK, and the US-backed 1973 military coup of the socialist government of Salvador Allende in Chile. Other examples are the tens of thousands killed after the defeat of the Paris Commune in 1871 [4], German Revolution 1918-19, the EU drastic threats against the Syriza Greek government in 2015, and the demonisation of Jeremy Corbyn.

Myth – capitalism is the only system that provides individual and economic freedom

The moral argument for capitalism is based on individual freedom being a natural right that pre-exists society. Capitalist society is valued and justified because it benefits humans and enhances economic freedom, instead of limiting it.

This individual and economic freedom is a limited form of freedom. In the #ACFM episode – Trip 10 How It Feels to Be Free, several forms of freedom are discussed. These include comparing the liberal, conservative, radical and authoritarian traditions and their relationship to freedom [5]. They also discussed Isaiah Berlin’s Two Concepts of Liberty – positive and negative [6]. The negative concept is freedom from constraint to do what you want. This is described as the ‘Jeremy Clarkson concept of freedom’ or the ‘anti-woke concept of freedom [7] The positive idea is a freedom to do something and for many, this means that the material conditions have to be created, which resulted in the post-war welfare state. [8]

Myth – everything is better under capitalism

The arguement goes that capitalism has resulted in improved basic standards of living, reduction in poverty and increased life expectancy. There is also the argument that Western capitalist countries have the happiest populations because they can consume whatever products and services they like.

The truth behind this myth is that capitalism results in economic growth, which has come at huge costs – see the economic growth myths below. The myth is that capitalism intentionally results in better living standards for workers and the general population. This relates to the liberal myth about liberal progress (see a future post on this). Any reform or improvement in the living standards of workers and the general population has to be fought for by people and groups (trade unions, social movements or in parliament) who want these improvements. Historically movements challenged capitalism for higher wages which resulted in longer life expectancy and a decline in infectious diseases. The capitalists certainly don’t want these reforms if it means improved rights for workers and limits their ability to increase their profits. The capitalists are of course more than happy to use these reforms as examples of how good capitalism is, when in fact they resisted them and work to undo them. Some capitalists practice a form of Victoria philanthropy but still want to exploit their workers. In recent years life expectancy in Britain and the US has started to decline due to austerity and other reasons. [9]

And to quote Ha-Joon Chang:

“The average US citizen does have greater command over goods and services than his counterpart in any other country in the world except Luxemburg. However, given the country’s high inequality, this average is less accurate in representing how people live than the averages for other countries with a more equal income distribution. Higher inequality is also behind the poorer health indicators and worse crime statistics of the US. Moreover, the same dollar buys more things in the US than in most other rich countries mainly because it has cheaper services than in other comparable countries, thanks to higher immigration and poorer employment conditions. Furthermore, Americans work considerably longer than Europeans. Per hour worked, their command over goods and services is smaller than that of several European countries. While we can debate which is a better lifestyle – more material goods with less leisure time (as in the US) or fewer material goods with more leisure time (as in Europe) – this suggests that the US does not have an unambiguously higher living standard than comparable countries.” [10]

In terms of happiness, people are not stupid. They understand that they don’t have any influence on the direction of society, that things are going to be worse for future generations but there isn’t anything they can do about it. Buying more stuff and going on more holidays is a consolation prize that stops people looking for real change. Also, the number of antidepressant prescriptions doubled between 2008 and 2018, not a sign that people are happy.

Myth – as capitalism increases the size of the economy, everyone benefits

Capitalism results in exponential economic growth, so the arguement goes that this allows companies and individuals to benefit. This relates to the idea of, ‘A rising tide lifts all boats’ and ‘trickle-down economics‘ , where if the rich get richer, then this will benefit everyone.

And to quote Ha-Joon Chang:

“The above idea, known as ‘trickle-down economics’, stumbles on its first hurdle. Despite the usual dichotomy of ‘growth-enhancing pro-rich policy’ and ‘growth-reducing pro- poor policy’, pro-rich policies have failed to accelerate growth in the last three decades. So the first step in this argument – that is, the view that giving a bigger slice of pie to the rich will make the pie bigger – does not hold. The second part of the argument – the view that greater wealth created at the top will eventually trickle down to the poor – does not work either. Trickle down does happen, but usually its impact is meagre if we leave it to the market.” [11]

Myth – free-market capitalism is the best way to run the global economy

Capitalism produces a wide range of goods and services based on what is wanted or can solve a problem. It is argued that capitalism is economically efficient because it creates incentives to provide goods and services efficiently. The competitive market forces companies to improve how they are organised and use resources efficiently. [12]

This needs to be broken down into several arguments: the instability of capitalism, free-market vs state planning, free-market economics has only been applied in non-Western countries, corporations need to be regulated, where technology innovation happens, the impact of unlimited economic growth on the environment/planet.


Since the 1970s government have focused on ensuring price stability by managing inflation. This has not resulted in the stability of the world economy as the 2008 financial crisis shows. [13] Instability and crisis are part of the capitalist economic system. It is a cycle that starts when the memory of past economic crises fade and financial institutions figure out ways to circumvent the regulations that were put in place to stop them happening again. Rising asset prices reduce the cost of borrowing, resulting in market euphoria and risks being underestimated. Lots of money is being made and everyone wants their share of the growing economic boom (Richard Wolff Financial Panics, then and now in Capitalism Hits the Fan). Capitalism also needs crises so that businesses and wealth are destroyed, which lays the foundations for the next cycle of economic growth to start. This is known as ‘creative destruction‘.

There is also the argument that financial markets need to become more efficient so they can respond to changing opportunities and grow faster. Basically that there should not be any state restrictions on financial markets.

And to quote Ha-Joon Chang in 23 Things They Don’t Tell You About Capitalism:

“The problem with financial markets today is that they are too efficient. With recent financial ‘innovations’ that have produced so many new financial instruments, the financial sector has become more efficient in generating profits for itself in the short run. However, as seen in the 2008 global crisis, these new financial assets have made the overall economy, as well as the financial system itself, much more unstable. Moreover, given the liquidity of their assets, the holders of financial assets are too quick to respond to change, which makes it difficult for real-sector companies to secure the ‘patient capital’ that they need for long-term development. The speed gap between the financial sector and the real sector needs to be reduced, which means that the financial market needs to be deliberately made less efficient.” [14]

free-market vs state planning

This myth is best dealt with by Ha-Joon Chang. He explains that there is no such thing as a free market. First, he describes the capitalist free market argument:

“Markets need to be free. When the government interferes to dictate what market participants can or cannot do, resources cannot flow to their most efficient use. If people cannot do the things that they find most profitable, they lose the incentive to invest and innovate. Thus, if the government puts a cap on house rents, landlords lose the incentive to maintain their properties or build new ones. Or, if the government restricts the kinds of financial products that can be sold, two contracting parties that may both have benefited from innovative transactions that fulfil their idiosyncratic needs cannot reap the potential gains of free contract. People must be left ‘free to choose’, as the title of free-market visionary Milton Friedman’s famous book goes.”

His response is:

“The free market doesn’t exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How ‘free’ a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketeers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined ‘free market’ is the first step towards understanding capitalism.” [15]

Robert Reich in Saving Capitalism: For The Many, Not The Few explains how the free market idea has poisoned peoples minds so that they think the negative impacts of the free market are simply unfortunate but impersonal outcomes of market forces. When in fact these outcomes benefit governing class and wealthy interests. [16]

Another challenge to the free market myth is that: “in order to secure profits, and to maintain their position of privilege against potential rivals, capitalists (both individuals and institutions) will frequently work to secure monopoly control of particular economic sectors, limiting invention and production within those sectors.” [17]

Capitalists argue against market regulation and claim that governments can’t pick winners. States construct markets, they enforce contracts, provide basic services and support the monetary system that is required for economic activity to take place. Importantly, they do this in a way that favours certain interests over others. [18]

The 2008 and 2020 economic crises have shown how capitalists advocate the free market as the only way to run the economy until a crisis comes along. At that point, they want state support and bailouts. This is known as “socialism for the rich and capitalism for the poor”, “Socialize Costs, Privatize Profits” and ‘lemon socialism‘. This is a good video of Richard Wolff on how American capitalism is just socialism for the rich.

We are told that we are not smart enough to leave things to the market. Ha-Joon Chang summarises this argument:

“We should leave markets alone, because, essentially, market participants know what they are doing – that is, they are rational. Since individuals (and firms as collections of individuals who share the same interests) have their own best interests in mind and since they know their own circumstances best, attempts by outsiders, especially the government, to restrict the freedom of their actions can only produce inferior results. It is presumptuous of any government to prevent market agents from doing things they find profitable or to force them to do things they do not want to do, when it possesses inferior information.”

His response to this myth:

“People do not necessarily know what they are doing, because our ability to comprehend even matters that concern us directly is limited – or, in the jargon, we have ‘bounded rationality’. The world is very complex and our ability to deal with it is severely limited. Therefore, we need to, and usually do, deliberately restrict our freedom of choice in order to reduce the complexity of problems we have to face. Often, government regulation works, especially in complex areas like the modern financial market, not because the government has superior knowledge but because it restricts choices and thus the complexity of the problems at hand, thereby reducing the possibility that things may go wrong.” [19]

Leigh Phillips and Michal Rozworski state that: “perhaps the strongest argument ever mounted against the left by the right is that the calculation and coordination involved in running a complex economy to satisfy disparate human needs and desires simply could not be consciously carried out. Only decentralised price signals operating through the market, miraculously aggregating an infinitude of disparate information, could guide an economy without dramatic failures, misallocations, and ultimately, authoritarian disasters.” They describe how the Second World War saw governments solve complex coordination problems. [20] In their book, People’s Republic of Walmart: How the World’s Biggest Corporations are Laying the Foundation for Socialism, they explain how most Western economies are centrally planned.

Ha-Joon Chang explains that despite the fall of communism, we are still living in planned economies. The capitalist argument goes:

“The limits of economic planning have been resoundingly demonstrated by the fall of communism. In complex modern economies, planning is neither possible nor desirable. Only decentralized decisions through the market mechanism, based on individuals and firms being always on the lookout for a profitable opportunity, are capable of sustaining a complex modern economy. We should do away with the delusion that we can plan anything in this complex and ever- changing world. The less planning there is, the better.”

Ha-Joon Chang response is:

“Capitalist economies are in large part planned. Governments in capitalist economies practise planning too, albeit on a more limited basis than under communist central planning. All of them finance a significant share of investment in R&D and infrastructure. Most of them plan a significant chunk of the economy through the planning of the activities of state-owned enterprises. Many capitalist governments plan the future shape of individual industrial sectors through sectoral industrial policy or even that of the national economy through indicative planning. More importantly, modern capitalist economies are made up of large, hierarchical corporations that plan their activities in great detail, even across national borders. Therefore, the question is not whether you plan or not. It is about planning the right things at the right levels.” [21]

Free market economics has only been applied in non-Western countries

Noam Chomsky explains that pure free-market economics (he calls it Laissez-faire principles) has only been applied to non-Western countries. Attempts by Western governments to try it have gone badly and been reversed.

Corporations need to be regulated

We are told that a strong economy needs corporations to do well. Ha-Joon Chang explains the argument:

“At the heart of the capitalist system is the corporate sector. This is where things are produced, jobs created and new technologies invented. Without a vibrant corporate sector, there is no economic dynamism. What is good for business, therefore, is good for the national economy. Especially given the increasing international competition in a globalizing world, countries that make opening and running businesses difficult or make firms do unwanted things will lose investment and jobs, eventually falling behind. Government needs to give the maximum degree of freedom to business.”

His response:

“Despite the importance of the corporate sector, allowing firms the maximum degree of freedom may not even be good for the firms themselves, let alone the national economy. In fact, not all regulations are bad for business. Sometimes, it is in the long-run interest of the business sector to restrict the freedom of individual firms so that they do not destroy the common pool of resources that all of them need, such as natural resources or the labour force. Regulations can also help businesses by making them do things that may be costly to them individually in the short run but raise their collective productivity in the long run – such as the provision of worker training. In the end, what matters is not the quantity but the quality of business regulation.” [22]

There is also the myth about the need to maximise shareholder value over the performance of the company. This results in managers focusing on increasing the share value instead of business performance. They are of course related but this approach results in managers making decisions that have negative effects on the company performance. [23]


The capitalist argument is made by conservative MP Chris (failing) Grayling:

If you believe in capitalism and free enterprise, then you believe that by allowing people to pursue success for themselves you create a culture of innovation and competition which benefits the whole of society. Free enterprise, business innovating in products and services, benefits the whole of our society.”

Although technological dynamism has been a strong argument for capitalism, investing in research and development it is too risky and takes too long for most capitalists to fund. The majority is publicly funded. [24]

Jeremy Gilbert argues that the creativity that leads to artistic, scientific or utilitarian inventions is not created by capitalism but instead from human interaction on the edges of capital. Then capital feeds on this creativity and transforms it into products to sell. This is why capital must locate itself near great centres of collective exchange and creativity such as London and Paris in the 19th century, New York and California in the 20th century. [25]

the impact of unlimited economic growth on the environment

It’s not possible to have infinite economic growth on a finite planet. [26] Capitalism requires that the economy grows each year. This requires that this year more things need to be made, more energy needs to be used and more people need to be born than last year. Then next year, more of all this is needed than this year.

Myth – capitalist economic theory is the best

Richard Wolff and Stephen Resnick summarise neoclassical theory’s contribution as:

“The originality of neoclassical theory lies in its notion that innate human nature determines economic outcomes. According to this notion, human beings naturally possess the inherent rational and productive abilities to produce the maximum wealth possible in a society. What they need and have historically sought is a kind of optimal social organization—a set of particular social institutions—that will free and enable this inner human essence to realize its potential, namely the greatest possible well-being of the greatest number. Neoclassical economic theory defines each individual’s well-being in terms of his or her consumption of goods and services: maximum consumption equals maximum well-being.

Capitalism is thought to be that optimum society. Its defining institutions (individual freedom, private property, a market system of exchange, etc.) are believed to yield an economy that achieves the maximum, technically feasible output and level of consumption. Capitalist society is also harmonious: its members’ different desires—for maximum enterprise profits and for maximum individual consumption—are brought into equilibrium or balance with one another.” [27]

Economics as a subject is based only on the theories of those who support it. University courses in economics are only taught by those that support capitalism. They do not teach the significant problems with capitalism or the viable alternatives. [28]

Ha-Joon Chang in 23 Things They Don’t Tell You About Capitalism explains that good economic policy does not require good economists. That the most successful economic bureaucrats are not normally economists, giving examples of Japan, Korea, China and Taiwan. [29]

The author of Capitalism 4.0: The Birth of a New Economy, Anatole Kaletsky recommends Beyond Mechanical Markets: Asset Price Swings, Risk, and the Role of the State by Roman Frydman and Michael D. Goldberg, which unpacks the economic assumptions mainstream economics is based on. Markets are not predictably rational or irrational. They argue instead that price swings are driven by individuals’ ever-imperfect interpretations of the significance of economic fundamentals for future prices and risk. [30]

Myth – capitalism maintains low taxes, which is good for workers and businesses

The arguement goes that low business taxes encourage companies to stay in a country and provide more jobs by reinvesting the money they would pay in tax into the company. Some also argue that low business tax generates more tax for the government. [31]

Some capitalists would prefer to pay no taxes at all. But the capitalists need the things that taxes pay for: police, schools, healthcare, transport systems. These public goods support capitalist society so there are workers to employ (exploit). [32] They also need the welfare state and public services to ensure capitalism’s survival and people do not become so desperate that they rise up and revolt.

The argument goes that low business tax (corporation tax) result in more business starting up so more jobs. Also, the advocates of low corporation tax state that low tax means businesses will reinvest to make it more competitive, [33] instead of giving shareholders a dividend. For this reinvestment argument to add up then the UK would not have the lowest worker productivity rates in the last 250 years or compared to other countries in Europe. The first article puts the drop in productivity down to: the lasting effect of the 2008 crisis for the financial system; weaker gains from computer technologies in recent years after a boom in the late 1990s and early 2000s; and intense uncertainty over post-Brexit trading relationships sapping business investment. The second article explains the decline is due to: less investment in equipment and infrastructure within the business; less spent on research and development; poor national infrastructure (roads and rail networks); and a lack of trade skills, basic literacy and numeracy skills, and lack of managerial competence.

These companies should be reinvesting in there business with more equipment, infrastructure and training. Add to this that the other issues listed in these articles can be resolved by the government but they choose not to because capitalists do not want highly skilled and well-paid workers, only working four days a week because that would give people time to start thinking and organising for how to make society better. [34] This article argues that reducing the corporate tax rate does not increase worker wages or business reinvestment.

There is also the myth/argument that if you increase taxes then the rich and businesses will relocate abroad. This article shows that the rich do not leave if you increase taxes. Also if businesses are going to relocate this will be to reduce the worker wages costs or where environmental regulations are less strict.

This telegraph article [35] from 2015 explains that corporation tax received by the government was up by 12% compared to 2014, even though the corporation tax percentage had dropped. The article does explain that company profits were up, partly because there was little wage growth. Corporation tax is based on the amount of profits a company takes. So while workers are struggling on low wages, UK company shareholders are taking more profits. It also explains that the UK has a lot more start-up companies that in the past. This is just what capitalists want, loads of small business owners who are more conservative, risk-averse and want the status quo to be maintained. This article does drone on about how unfair it is to say that companies don’t pay their fair share. Most people know that most companies pay their taxes. That complaint is directed at Amazon, Apple and the other tax-dodging big players. This article makes the case that cutting corporation tax costs the government billions.

Ha-Joon Chang challenges the capitalist myth that big government is bad for the economy. He explains that “A well-designed welfare state can actually encourage people to take chances with their jobs and be more, not less, open to changes.” [36]

Myth – capitalism promotes equality, work hard and you’ll get rich

This is the ‘American Dream’ idea that you may start poor but if you work hard, you can be successful and rich. This is also known as meritocracy. [37]

The equality that this refers to is the equality of opportunity. Ha-Joon Chang describes the capitalist argument:

“Many people get upset by inequality. However, there is equality and there is equality. When you reward people the same way regardless of their efforts and achievements, the more talented and the harder-working lose the incentive to perform. This is equality of outcome. It’s a bad idea, as proven by the fall of communism. The equality we seek should be the equality of opportunity. For example, it was not only unjust but also inefficient for a black student in apartheid South Africa not to be able to go to better, ‘white’, universities, even if he was a better student. People should be given equal opportunities. However, it is equally unjust and inefficient to introduce affirmative action and begin to admit students of lower quality simply because they are black or from a deprived background. In trying to equalize outcomes, we not only misallocate talents but also penalize those who have the best talent and make the greatest efforts.”

His response:

“Equality of opportunity is the starting point for a fair society.

But it’s not enough. Of course, individuals should be rewarded for better performance, but the question is whether they are actually competing under the same conditions as their competitors. If a child does not perform well in school because he is hungry and cannot concentrate in class, it cannot be said that the child does not do well because he is inherently less capable. Fair competition can be achieved only when the child is given enough food – at home through family income support and at school through a free school meals programme. Unless there is some equality of outcome (i.e., the incomes of all the parents are above a certain minimum threshold, allowing their children not to go hungry), equal opportunities (i.e., free schooling) are not truly meaningful.” [38]

Economic equality is really what we need to be concerned about. Danny Dorling describes how “The gap between the very rich and the rest is wider in Britain than in any other large country in Europe, and society is the most unequal it has been since shortly after the First World War.” [39]

The benefits for this myth for the capitalists is that it gives workers some hope that things can be better if they work that bit harder to chase the material benefits. It rewards some to keep the dream alive. It is also a cover for the business owners, managers and shareholders to justify their wealthy position. They can say they earned their money through hard work. Of course many inherited their wealth. [40]

There is also the capitalist myth that low worker wages mean lower prices for consumers. This has some truth in it but it is mainly a justification for low worker wages and high business managers wages. By this logic, higher manager wages result in higher consumer prices but there is generally lower investment in production costs (equipment and infrastructure). This results in low worker wages and fewer jobs [41]

Ha-Joon Chang in 23 Things They Don’t Tell You About Capitalism describes how US managers are over-priced:

“US managers are over-priced in more than one sense. First, they are over-priced compared to their predecessors. In relative terms (that is, as a proportion of average worker compensation), American CEOs today are paid around ten times more than their predecessors of the 1960s, despite the fact that the latter ran companies that were much more successful, in relative terms, than today’s American companies. US managers are also over-priced compared to their counterparts in other rich countries. In absolute terms, they are paid, depending on the measure we use and the country we compare with, up to twenty times more than their competitors running similarly large and successful companies. American managers are not only over-priced but also overly protected in the sense that they do not get punished for poor performance. And all this is not, unlike what many people argue, purely dictated by market forces. The managerial class in the US has gained such economic, political and ideological power that it has been able to manipulate the forces that determine its pay.” [42]

Myth – capitalism fits well with human nature

The arguments goes that humans are naturally selfish, greedy and competitive. People that work hard are successful and outcompete their competitors, and are therefore rewarded financially. Capitalism also allows for other aspects of human nature such as altruism, patience and kindness. This is done through the creation of welfare systems and charities. [43]

Robert Jensen’s response to this is:

“There is a theory behind contemporary capitalism. We’re told that because we are greedy, self-interested animals, an economic system must reward greedy, self-interested behavior if we are to thrive economically. Are we greedy and self-interested? Of course. At least I am, sometimes. But we also just as obviously are capable of compassion and selflessness. We certainly can act competitively and aggressively, but we also have the capacity for solidarity and cooperation. In short, human nature is wide-ranging. Our actions are certainly rooted in our nature, but all we really know about that nature is that it is widely variable. In situations where compassion and solidarity are the norm, we tend to act that way. In situations where competitiveness and aggression are rewarded, most people tend toward such behavior. Why is it that we must choose an economic system that undermines the most decent aspects of our nature and strengthens the most inhuman? Because, we’re told, that’s just the way people are. What evidence is there of that? Look around, we’re told, at how people behave. Everywhere we look, we see greed and the pursuit of self-interest. So, the proof that these greedy, self-interested aspects of our nature are dominant is that, when forced into a system that rewards greed and self-interested behavior, people often act that way. Doesn’t that seem just a bit circular?”

And Ha-Joon Chang response to capitalism’s human nature arguement is:

“Self-interest is a most powerful trait in most human beings. However, it’s not our only drive. It is very often not even our primary motivation. Indeed, if the world were full of the self- seeking individuals found in economics textbooks, it would grind to a halt because we would be spending most of our time cheating, trying to catch the cheaters, and punishing the caught. The world works as it does only because people are not the totally self-seeking agents that free-market economics believes them to be. We need to design an economic system that, while acknowledging that people are often selfish, exploits other human motives to the full and gets the best out of people. The likelihood is that, if we assume the worst about people, we will get the worst out of them.” [44]

Myth – capitalism and democracy work well together

The argument goes that capitalism is built on democracy. Everyone gets one vote so they have equal political power, which is not affected by their race, gender or views. Capitalism also encourages people to get involved in all aspects of society to get what they want. This includes getting involved with both governance and the government, from voting in elections to standing in local or national elections. [45]

Robert Jensen explains how capitalism is anti-democratic:

“This one is easy. Capitalism is a wealth-concentrating system. If you concentrate wealth in a society, you concentrate power. Is there any historical example to the contrary? For all the trappings of formal democracy in the contemporary United States, everyone understands that the wealthy dictates the basic outlines of the public policies that are acceptable to the vast majority of elected officials. People can and do resist, and an occasional politician joins the fight, but such resistance takes extraordinary effort. Those who resist win victories, some of them inspiring, but to date concentrated wealth continues to dominate. Is this any way to run a democracy? If we understand democracy as a system that gives ordinary people a meaningful way to participate in the formation of public policy, rather than just a role in ratifying decisions made by the powerful, then it’s clear that capitalism and democracy are mutually exclusive. Let’s make this concrete. In our system, we believe that regular elections with the one-person/one-vote rule, along with protections for freedom of speech and association, guarantee political equality. When I go to the polls, I have one vote. When Bill Gates goes the polls, he has one vote. Bill and I both can speak freely and associate with others for political purposes. Therefore, as equal citizens in our fine democracy, Bill and I have equal opportunities for political power. Right?”

Not everyone does get to vote, some such as criminals no longer have that right. Many don’t bother to vote as the options between several capitalist political parties feel very limited. Government can’t go against global capitalism as the Greek Syriza government found out when it tried to reject austerity in 2015. There is also the problems and unfairness of the First Past the Post voting system, which benefits rightwing, extreme pro-capitalist parties. Also, these parties do better in elections when voter turnout is lower. [46]

Richard Wolff makes the point that we spend half of our time in undemocratic companies. A small group of people (boards of directors and shareholders) make decisions in businesses that affect the workers such as if the business shuts down and moves overseas, who loses their job and who gets the profits. But the workers do not have any say in these decisions. Outside the workplace, people get to vote in our local communities and national government. [47]

Ha-Joon Chang explains that companies should not be run in the interest of their owners:

“Shareholders may be the owners of corporations but, as the most mobile of the ‘stakeholders’, they often care the least about the long-term future of the company (unless they are so big that they cannot really sell their shares without seriously disrupting the business). Consequently, shareholders, especially but not exclusively the smaller ones, prefer corporate strategies that maximize short-term profits, usually at the cost of long-term investments, and maximize the dividends from those profits, which even further weakens the long-term prospects of the company by reducing the amount of retained profit that can be used for re-investment. Running the company for the shareholders often reduces its long-term growth potential.” [48]

Myth – Capitalism gradually balances differences across countries through free markets and free trade.

The arguement goes that countries can use their competitive advantage to benefit themselves and also access goods and services from the rest of the world. [49]

Ha-Joon Chang describes how free-market policies rarely make poor countries rich. The capitalist argument is:

“After their independence from colonial rule, developing countries tried to develop their economies through state intervention, sometimes even explicitly adopting socialism. They tried to develop industries such as steel and automobiles, which were beyond their capabilities, artificially by using measures such as trade protectionism, a ban on foreign direct investment, industrial subsidies, and even state ownership of banks and industrial enterprises. At an emotional level this was understandable, given that their former colonial masters were all capitalist countries pursuing free-market policies. However, this strategy produced at best stagnation and at worst disaster. Growth was anaemic (if not negative) and the protected industries failed to ‘grow up’. Thankfully, most of these countries have come to their senses since the 1980s and come to adopt free-market policies. When you think about it, this was the right thing to do from the beginning. All of today’s rich countries, with the exception of Japan (and possibly Korea, although there is debate on that), have become rich through free-market policies, especially through free trade with the rest of the world. And developing countries that have more fully embraced such policies have done better in the recent period.

His response:

“Contrary to what is commonly believed, the performance of developing countries in the period of state-led development was superior to what they have achieved during the subsequent period of market-oriented reform. There were some spectacular failures of state intervention, but most of these countries grew much faster, with more equitable income distribution and far fewer financial crises, during the ‘bad old days’ than they have done in the period of market- oriented reforms. Moreover, it is also not true that almost all rich countries have become rich through free-market policies. The truth is more or less the opposite. With only a few exceptions, all of today’s rich countries, including Britain and the US – the supposed homes of free trade and free market – have become rich through the combinations of protectionism, subsidies and other policies that today they advise the developing countries not to adopt. Free-market policies have made few countries rich so far and will make few rich in the future.” [50]


  1. 23 Things They Don’t Tell You About Capitalism, Ha-Joon Chang, 2011, introduction
  3. Jody Dean 11m
  4.; Massacre: The Life and Death of the Paris Commune of 1871, John M. Merriman, 2016;
  5. #ACFM episode – Trip 10 How It Feels to Be Free, from 11m
  6. #ACFM episode – Trip 10 How It Feels to Be Free, from 13m
  7. #ACFM episode – Trip 10 How It Feels to Be Free, from 36 mins
  8. #ACFM episode – Trip 10 How It Feels to Be Free, from 14m
  10. 23 Things They Don’t Tell You About Capitalism, Ha-Joon Chang, 2011, thing 10)
  11. 23 Things They Don’t Tell You About Capitalism, thing 13
  13. 23 Things They Don’t Tell You About Capitalism, thing 6
  14. 23 Things They Don’t Tell You About Capitalism, thing 22
  15. 23 Things They Don’t Tell You About Capitalism, thing 1
  17. Anticapitalism and Culture: Radical Theory and Popular Politics, Jeremy Gilbert, 2008, page 108, also see Capitalism 4.0: The Birth of a New Economy, Anatole Kaletsky, 2011, <ahref=”” target=”_blank” rel=”noopener”>
  18. Tribune Magazine, Spring 2020 The Era of State-Monopoly Capitalism, Grace Blakely page 29,
  19. 23 Things They Don’t Tell You About Capitalism, thing 16
  20. Tribune Magazine, Spring 2020, Planning the Future page 69,
  21. 23 Things They Don’t Tell You About Capitalism, thing 19
  22. 23 Things They Don’t Tell You About Capitalism, thing 18
  25. Anticapitalism and Culture, page 109
  26., Overshoot: The Ecological Basis of Revolutionary Change, William R. Catton Jr, 1982,
  27. Contending Economic Theories: Neoclassical, Keynesian, Marxian, Richard Wolff and Stephen Resnick, 2012, page 52
  28. Richard Wolff 44m
  29. 23 Things They Don’t Tell You About Capitalism, thing 23
  30. and
  32. Richard D. Wolff Lecture on Worker Coops: Theory and Practice of 21st Century Socialism 46m
  34. see Capitalist class project section from
  35. – download word doc of article Why lower corporation tax means more for Treasury
  36. 23 Things They Don’t Tell You About Capitalism, thing 21


  38. 23 Things They Don’t Tell You About Capitalism, thing 20


  40. (Capitalism say ‘we earned it’ Richard Wolff Marxism 101 27m and justification why employer paid so much RW Understanding Marxism 117m

  41. Capitalism Hits the Fan, Richard Wolff, 2010, Real Costs of Exec Money Grabs

  42. 23 Things They Don’t Tell You About Capitalism, thing 14


  44. 23 Things They Don’t Tell You About Capitalism, thing 5



  47. Richard Wolff 21m

  48. 23 Things They Don’t Tell You About Capitalism, thing 2


  50. 23 Things They Don’t Tell You About Capitalism, thing 7