Freedom is Capitalism’s Great Illusion

znetwork | Bridget Meehan

One of the great strengths of capitalism, we’re told, is the individual and corporate freedoms it gives. Compared to other systems, we’re told, like feudalism or communism, capitalism allows us enormous latitude to make decisions about how we live our lives: we are free to innovate and create, free to voice our opinions, free to get an education, to apply for a job and to quit it, free to buy what we want, go where we like, choose where we live.

Whenever the topic of replacing capitalism is discussed, freedom becomes a focus of conversation, even if the conversation is with people on the Left who generally believe capitalism is harmful. Across the political spectrum, many believe that if we jettison capitalism, we also stand to jettison the tremendous liberty capitalism affords us. How can any other economic system ever provide that same level of freedom no matter how benign, no matter how just, no matter how protective of the environment, it may be? Can we really take the chance on an alternative that gives us no guarantee that we’ll keep the freedom we enjoy in capitalism, despite its other flaws?

If we consider freedom to be the absence of power and coercion over people, and as having the liberty to do the things we want to do, as described by Rob Larson in his book Capitalism Vs. Freedom, it’s worth taking a closer look at some of the aspects of freedom under capitalism because things might not be as they seem.

Take employment. In capitalism, we’re told that we have the freedom to apply for any job we want. Technically, that’s true. There’s no legal impediment preventing me or you from applying for a job. However, having the freedom to apply for a job and actually securing a job are two very different things. I might not be able to find any suitable jobs where I live or the jobs that are available have unsociable hours or are otherwise unfeasible. And if I apply for a job I’m not qualified for, I’m not going to get it—although that would be true for any economy.

The logic of capitalism will of course have answers to all of these stumbling blocks. If there are no jobs where I live, I can move away or commute for hours each day. If the hours are unsociable and conflict with my caring responsibilities or the job is too dangerous or otherwise unworthy, I should get over myself, this is only to be expected of working life. The only thing standing in the way of taking any of these options is me.

And if I’m not qualified, well, hey, I can go and get qualified. Because in capitalism, I’m completely free to gain a qualification or a skill in whatever profession I wish. The opportunities are boundless. Though maybe not.

Assuming I have the academic acumen to gain the qualification or skill I’m after, there are other barriers that will get in my way. In most countries, earning a college qualification or acquiring a skill is costly. If my government doesn’t subsidise or cover the costs of course fees and sustenance, I’ll have to pay them myself; and if I don’t have the money I’ll have to borrow it. Any loan I take out is unlikely to cover all my costs so that will mean making up the deficit by working part-time, not to mention that once I finish my training, I’ll have student debt that might take most of my working life to pay off.

And there’s a deeper set of obstacles. Say I was raised in an impoverished home where my parent, parents or guardian worked two jobs each to provide the essentials and hadn’t time to nurture pre-school learning. Say that meant, when I started school, I lacked the basic developmental skills for my age, putting me at a great disadvantage. As I went through school, no one really noticed I was falling behind. Not at home because they were stressed out making ends meet. Not at school because classes were overcrowded and under resourced; not to mention that the system is set up so most kids fail, leaving them perfect to take on the menial jobs required by capitalism. I fell so far behind that it reached a point where I couldn’t catch up. This made me feel stupid and useless and I ended up leaving without any qualifications. After that experience, the freedom to go and get qualified doesn’t seem very tangible.

But let’s say that my impoverished parents had been able to give me the attention I needed so that I did achieve academically. Even then, I’m guaranteed nothing. It’s a fact that social mobility isn’t that easy without resources and connections, and it’s more and more the case that we don’t move far from where we start in life. We might get lucky but the odds are against us because of the 80/20 rule: that is, 80% of the jobs in capitalism are low-skilled, low-paid, rote and disempowering; and about 20% of the jobs are skilled, higher-paid and empowering (although even these are experiencing an ever-downward push on salaries and working conditions). The upshot is, if lots and lots of us don’t end up qualified or reaching our full potential, that’s better for the system. Capitalism, for all its boasts of freedom, needs a large army of serfs.

Putting that aside, let’s say I’m in the 80% and I gain employment in a low-skilled, low-paid job. My workplace will most likely be hierarchical and I’ll have no autonomy or say over what happens. I’ll be told what to do by my ‘superiors’ and my working day will be filled with sameness and monotony. I’ll know nothing about the business so I won’t have the information needed to make decisions that impact on daily operations and the future of the business; not that I’d be allowed to make decisions like that anyway. Essentially, I’ll do what school trained me to do: take orders and endure boredom. While I might live in a formally democratic society (as much as any society is democratic) my workplace will be a veritable dictatorship. As for freedom, I can leave that at the door.

In such an oppressive environment, I’ll have no opportunity to be creative or innovative. My ‘superiors’ certainly won’t need that from me and they’ll probably discourage any kind of independent or creative thought. I might find that my brain is so dulled by the monotony of what I do and my body so exhausted with the long hours and the pressure of not having enough money to get by, that I won’t have the energy or time to pursue innovative or creative pursuits.

Of course, if I don’t like my work situation, capitalism tells me I have complete freedom to quit that job and go find another. So, yes, I can do that. I can leave my low-paid, low-skilled, rote and disempowering job anytime I want. But with the same lack of qualifications, my new job will probably be low-paid, low-skilled, rote and disempowering too. I’ll simply leave one dictatorship to go into another dictatorship.

That said, capitalism has produced people like Mark Zuckerberg and Elon Musk. Because of capitalism, people like this have freely innovated and become insanely rich. We’re told that any of us can achieve the same if only we pull ourselves up by our bootstraps. But is that really there for the taking? For all of us? In truth, the richest people in the world rarely start at the bottom, like in a single-parent family from the Projects, and work their way up. They are more likely to come from families with means, attend the best, or at least good, schools and colleges, and have opportunities and doors opened to them. Not to say that some don’t have talents or ability but those alone don’t take anybody to the top.

The story is told about the guy who started selling books online out of a humble garage and ended up one of the richest people in the world. Sound familiar? Yeah, you got it. This is the story of Jeff Bezos and Amazon. Only it’s not quite what it seems. While he was the son of a teenage mother, his grandfather was regional director of the US Atomic Energy Commission and owned a 25,000-acre ranch. He didn’t come from the richest background but it was affluent enough to give him opportunities that somebody from the Projects wouldn’t have; opportunities that made attending Princeton possible, which is a pretty good start. And when he and his wife founded Amazon, yes, from a garage, he’d previously been vice-president of a hedge fund earning over $500,000 a year.

Regardless of how capable, innovative, or hard-working a person is, without resources and connections, it’s nigh on impossible to achieve materialistic success on this scale. A tiny minority of people might start at the bottom and climb to those levels but behind their story will be found a lot of good luck. It’s much more common for those starting at the bottom to stay at the bottom regardless of their work ethic, their abilities or their creative ideas. Having vast numbers of people at the bottom is actually welcomed by capitalism. Remember the 80/20 rule: if we’re all insanely wealthy and at the top of the totem pole, who does the grunt work?

Of course, there’s a physical constraint to consider too. We’d need two-and-a-half planets, maybe more, to make it possible for everybody to live like a Jeff Bezos. As it stands, there simply aren’t the resources to accommodate even the 1% of people who have this immense wealth. For every one person afforded a life with too much wealth and resources, millions must live in poverty.

The above brings into question the very notion of a system that allows such concentrations of obscene wealth. Something is terribly wrong when one person can lavish millions of dollars on a work of art while another can’t afford to feed her children. But that’s exactly how capitalism works. In the first instance, capitalism sets out the false promise that we can all be rich. Then it tries to indoctrinate us into believing that being rich should be our life’s ambition and only measure of success, when actually the truth is we cannot all be rich and striving to be rich at all should repel us rather than be our greatest desire.

And now we come to that pinnacle of individual and corporate freedom unique to capitalism: the gift of the free market. According to the rules of the free market, we all have complete freedom to consume and produce at will. As long as governments are prevented as much as possible from imposing nasty regulations that fetter production and consumption, the world is our oyster. It doesn’t matter if what we consume or produce harms the environment or wastes resources or creates poverty. Thanks to capitalism, if I have the means, I’m free to build a 50-bedroom house with a pool, a tennis court and a mammoth carbon footprint, even while others live on the street with a cardboard box for shelter. On the other hand, for those of us with limited means, the free market is much less free. If we earn a low wage or even a modest wage, we’re greatly restricted by what we can consume, and have no say over what is available, in any case.

Because the market is entirely profit-driven and dominated by powerful corporations and wealthy individuals, other problems arise. Public goods, such as roads, social housing, public transport, energy infrastructure, education, primary research, are not as profitable as private goods. So unless government contracts are tendered to supply them, the market neglects these goods. Moreover, for goods that should be public but where private interests have muscled in, they’ve done so because they see an opportunity to turn a profit and delivering the right service or product becomes an afterthought. This has happened for example, in healthcare, in energy, in banking. In these areas, we’ve seen crises and it’s no coincidence that they’re dominated by private interests. We had a financial crisis in 2008; we’ve just come out of a Covid crisis; and we’re currently in an energy crisis—Richard D. Wolff would tell us these are all crises in capitalism. If we had real freedom of choice, the majority of people might prefer that health, energy and banking were public goods; so that access to life-saving vaccines would be free rather than available only to those who could afford them; so that no one would go without heat when at the same time energy companies raked in unprecedented profits; so that banks wouldn’t foreclose on mortgages while squandering their government bailout. We have the power to make none of that happen and that shows we have no freedom at all when it comes to the market.

The irony is that although many of us are convinced capitalism offers tremendous freedom, the vast majority of us have little or no freedom at all. In reality, we don’t decide what is produced, how it is produced, what incomes we get, and therefore what we consume, even individually, much less collectively. And while capitalism is better than feudalism with its advances in science, technology, medicine and living standards, who’s to say that these same advances wouldn’t have happened anyway with the discovery of fossil fuels and the unimaginable abundance of energy they gave us? Under a different system, a more egalitarian one not driven by greed, instead of becoming addicted to fossil fuels and ignoring the harm they were causing, we might have focused on finding safer alternatives. Under a different system, instead of allowing gross wealth and income inequalities, we might have distributed wealth more equally and put a limit on outrageously high incomes. Under a different system, instead of enslaving 80% of the population in drudgery, we would have nurtured their creativity and reaped the benefits of a society where everybody, not just a few, was allowed to invent and innovate. Under a different system, instead of letting profit and whims dictate production, we might have created products with social, environmental and cultural value such as community-owned renewable energy or patent-free medication. Who’s to say that without capitalism, we might have had all the advances we have now but without the impending extinction of our species?

The freedom we so cling to in capitalism, that one good thing we believe it offers, is really an illusion. And it follows that the pervasive belief that any alternative to capitalism will take away our freedom is another illusion. When we think of alternatives to capitalism, like Participatory Economics (Parecon), we should acknowledge that far from being a threat to freedom, these have the potential to make genuine freedom a reality.

Parecon promotes economic self-management and justice and ecological sustainability by embodying the values of solidarity, self-management, equity and diversity, and by replacing private ownership of the means of production with social ownership of the productive commons.

Under Parecon, we would have universal social provision of public education. Everyone would have the opportunity to develop their preferred skills and talents. With this as a foundation, we wouldn’t have the scenario where some kids are denied the opportunity to self-develop and nurture their talents. By the time they’d leave school, they’d be in a position to pursue the vocational or academic training of their choice without accumulating student debt; and once qualified, would be in a position to secure a decent job. No more would jobs be out of reach and unattainable. Parecon proposes a “full employment” economy ensuring everyone would be guaranteed a job, something that’s entirely achievable in an economy not driven by profit. All of us would receive a full average societal income and a little extra (or less) for working longer (or shorter) hours than average hours or for doing more (or less) onerous tasks. Those unable to work would receive a full average societal income.

Workplaces would look radically different too. The capitalist and coordinator classes would no longer exist, and with them economic hierarchy and authoritarianism. In their place would be non-hierarchical, democratic workplaces, self-managed by worker councils. The corporate division of labour would be replaced with balanced job complexes where each worker would do a fair mix of rote and empowering work. Instead of being based on reward for owning productive property or “human capital”, income would be based on effort and sacrifice, on how hard and long you work, and on the onerousness of the conditions under which you work. Implementing these practices would nurture co-operativism and solidarity in Parecon workplaces.

In a Parecon workplace, none of us would be condemned to a life of working in low-skilled, low-paid, rote and disempowering jobs. None of us would have to take orders. We would have autonomy to make decisions and the scope to innovate and be creative. And if for any reason we wanted to change jobs, we’d be free to go and find another workplace where we’d have all the same opportunities and desirable working conditions. Far from denying us freedom, we would enjoy freedom beyond anything we could hope for in capitalism.

Instead of a market, free or otherwise, Parecon proposes the use of participatory planning to carry out the function of allocation. This process would create a production and consumption plan where productive resources would be used efficiently. The plan would be achieved through an “iterative” procedure in which worker councils, neighbourhood consumer councils, and federations of councils request the goods and services they want by making “self-activity” proposals in response to ever more accurate estimates of the full social and ecological costs and benefits of producing and consuming different goods and services. In this way, “externalities” that are ignored in current market prices would be incorporated into Parecon prices and we would be forced us to make choices about what and what not to produce based on the best use of resources.

Requests for public goods and services would also be made through the production and consumption plan and presumably, without the profit-motive and private gain, we’d make decisions about which of those goods and services to produce based on actual need and benefit to society.

It’s clear from this short description that participatory planning would curtail certain choices that the market doesn’t. Freedom to produce and consume what we choose, regardless of the consequences, would be denied. Because everyone would receive a full average societal income, it would mean no one has to go without the essentials required for a decent standard of living—something the free market doesn’t guarantee. In Parecon, I’d have the freedom to consume what I need. I wouldn’t have the freedom to build a 50-bedroom house with a pool and a tennis court but I would have a home to live in and maybe my community might collectively pay for a tennis court we could all use.

So, yes, the participatory planning in Parecon does curb certain choices. But unlike now, those choices would be curbed by decisions we make ourselves, collectively, and not by wealthy elites who have power over us. And those choices would be curbed in the interests of protecting our environment, our resources and our society. So in a sense, restricting the freedom to have reckless consumption and production would actually open up other kinds of freedom: the freedom to live in a world that isn’t being destroyed; the freedom to live in a society that takes care of us. How does that deny us freedom, the kind that matters at least?

The greater levels of income equity afforded by Parecon would mean that no one has unfair advantages allowing them to become extremely rich. In fact, profiteering would be pointless since participatory planning would prevent anybody from spending excessive amounts of money. The creativity and innovation nurtured in self-managing workplaces would allow workers with ideas to thrive and pursue their ideas, and be recognised for their achievements. But they wouldn’t be awarded ridiculously obscene amounts of money that create the gross wealth and income inequalities we have today. That doesn’t diminish or remove anybody’s freedom, except for a tiny percentage of people who right now have far too much but, who under Parecon would have the same freedoms as everybody else.

When we take an honest look at what freedom means in capitalism, it’s obvious that we have to strip away the rhetoric and the myths that surround this entire concept. In capitalism, freedom is an illusion for most of us and for those who have it, it’s costing the earth. If we honestly believe there is no better alternative to capitalism, we must ask ourselves who or what benefits from us believing that? It would seem it isn’t the 99% or the wonder that is planet earth. Isn’t it about time we let go of capitalism’s illusion of freedom and shifted our focus to another system that has the potential to give us real freedom?