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Review of Capitalism: A Love Story

For good and ill, Michael Moore's Capitalism: A Love Story is a product of the current crisis of capitalism. On the one hand, this crisis forced Moore to try and go beyond liberal critiques of a single issue, the usual fare for his documentaries. Thus, in his latest documentary Moore aimed to critically examine capitalism, the very foundation of modern society. Unfortunately, the same preoccupation with the crisis prevented Moore from tackling capitalism in its entirety; instead we're treated to pallid denunciations of financial speculation, deregulation, and corporate greed, the forces Moore blames for the nastiness of the last couple of years -- which is all the nastiness that Moore seems to recognize.

Capitalism: A Love Story begins with several scenes steeped in pathos but conspicuously devoid of analysis, but before long Moore attempts to provide some explanation for the economic crisis that loomed so large during the production of his movie. He begins by proffering a jocular definition of capitalism as a "system of giving and taking -- mostly taking." Viewers are then subjected to a clip from a 1950s propaganda film in which one young American woman defines capitalism as a "system of free enterprise." After the young woman's friend prods her to "tell us what free enterprise is!" Moore inexplicably cuts to actor Wallace Shawn, who explains free enterprise thusly:

Free enterprise is a form of words intended to conjure up in your mind a little town with different shops, and the guy who runs the best shop has the most customers. ... The basic law of life is that if you have things, you can get more things. Pretty quickly, one guy has five times more than anybody else.

As if to distract us from the inadequacy of this definition, Moore immediately launches into a short history of the post-war economy. But by doing so he is only getting himself into a deeper hole. His inability to provide a real genealogy of the crisis, to understand the true misery of capitalism, becomes painfully evident. He begins his history with a wistful look back to his own youth. He claims that his autoworker father was able to buy a new car every third year, was able to pay off his home's mortgage before the kids entered school, was able to bring his family on vacation to New York every other summer, and so on:

If this was capitalism, I loved it. And so did everyone else. During these years a lot of people got rich, and they had to pay a top tax rate of 90%. 90%? Yeeeep. But they still got to live like Bogey and Bacall. And what did we do with all their money? We built dams, bridges, interstate highways, schools, hospitals, we even sent a guy to the moon. Things seemed to be going in the right direction. Dad had a secure job, mom could work if she wanted -- but didn't have to -- middle class families needed one job to survive. Our union family had free health care and free dental. The kids could go to college without getting a loan from a bank, dad had four weeks paid vacation every summer, most people had a savings account and little debt, and dad's pension was set aside where no one could touch it. It would be there for him when he retired. It would be there when he retired.

Most readers will recognize this as more than a little rose-tinted, but it does raise the question of what changed between the 1950s and today, a time when savings are unheard of for most workers and you're as likely to have your home foreclosed as you are to pay it off. Moore quickly offers one possible answer juxtaposing images of 1950s America with images of her vanquished foes of a decade earlier: "We got all this because our main industrial competition had been reduced to rubble. ... I guess you could say it's easy to be number one when you have no competition." Then Moore shows scenes of German and Japanese autoworkers as he tells us that Germany and Japan rebuilt and reentered the world market as producers (of better cars than what America made). Is increased global competition, absent immediately after the war, the cause for the boom and bust of the post-war economy? Even though Moore has all the pieces in place to explain it thusly, he opts for a completely different explanation. According to Moore, the real reason for the decline of the "golden age" of American capitalism was the election of Ronald Reagan in 1980 -- "Wall Street had found their sheriff." The attacks on workers and the deregulation of the economy in the 70s, 80s, and 90s are thus presented as the consequences of a clique of bad men taking power. But why did Wall Street need a "sheriff?" in the first place?

Moore never says, but answers are forthcoming once we figure out another question: just what is capitalism?

Most definitions of capitalism, particularly those advanced for public consumption, stress the freedom of buyers and sellers to interact, to set their own prices on the market, etc., usually without excessive assistance or interference from the state. But none of these characteristics is exclusive to or even inherent in the capitalist mode of production. Under slavery and feudalism, and especially so under the primitive communism which humanity lived its first ninety-nine one-hundredths of its existence as a species, the state either didn't exist or played less of a role in the economy than it does today. And to one degree or another, the other supposed features of capitalism were apparent, from private ownership to the ability to set prices without coercion. In fact, it was only with the advent of capitalism that the state's role in the economy became really important for the first time in history. Apart from the period 1850-1875 in Britain, no state has ever really pursued a laissez-faire policy. If the laissez-faire myth is more widely cherished in the United States than anywhere else in the world, then reality and myth diverge more here as well. Between 1783 and 1861, government funding accounted for 70% of the total investment in canals and 30% of the investment in railroads in the United States. The Erie Canal, the largest canal in the world at the time of its construction and a driving force in the development a market economy in the area, was publicly financed. Government assistance to private enterprise also came in the form of loans, protection of domestic manufacturers through tariffs, military "defense" of "American interests," the upholding of slavery in the Southern U.S., attacks on workers' attempts to organize, publication education, and so on. Indeed, Henry Charles Carey, one of the foremost American economists of the 19th century, and an economic advisor to President Abraham Lincoln, won his fame as a vociferous critic of British laissez-faire and an ardent defender of the "American system" of state intervention.

Now, if abstractions such as "freedom" and "non-intervention" aren't characteristics unique to capitalism, then what are the distinct features of capitalism? What sets it apart from preceding economic systems? What gives it its peculiar internal dynamic?

In short, the defining characteristic of capitalism -- what sets it apart from other systems and gives it its peculiar internal dynamic, including the tendency to crisis -- is the exploitation of wage-labor in the production of commodities. This is also the material basis for the swill about economic (and in turn political) equality, freedom, the lack of coercion, etc, that the capitalist motormouths never cease to preach, since in outward appearance capitalist society consists solely of buyers and sellers (of goods and labor-power) who freely associate according to their own self-interest. Dig a little deeper, however, and you see that things are less idyllic. Why does the worker sell his labor-power (his ability to work) for a wage? Because he has no other means to provide for his subsistence, since he or his ancestors were divorced from the land they once tilled or the small shop they once worked in. Then the capitalist pays this practically indigent worker wages and sets him to work out of the goodness of his heart? Far from it! In reality, the capitalist hires laborers not for charity, and not even for the labor they provide, but for the free, gratuitous, uncompensated labor they provide. This is, as Marx put it, the "great secret of modern society: the creation of surplus value."

But why and how does the capitalist obtain this gratuitous labor, this surplus value, from his employees? The answer is found in the nature of commodities, which is where Marx rightfully begins his investigation of capitalism in the first volume of Capital. A commodity is a thing that is produced for exchange on the market. The fact the virtually any two items can be exchanged, though perhaps in different quantities, suggests that all commodities have some identical quality. Why are 10 candy bars worth one puppy nursing bottle? Why are three sweaters worth one coat? These items have identical values, we can say. But what is the basis of this value? It can't be weight or shape or color or texture, since physical properties can differ widely among items of equal value. In fact, the only common property between all commodities is that they are products of labor. In fact, all any commodity ever contains is labor. Even the most advanced raw materials are only products of successive working by human hands. Thus the value of an item is determined by how much labor was expended in its creation. Not labor in specific -- then, as the famous example goes, the slow and lazy shoemaker should make the most valuable shoes -- but rather the socially necessary labor, the labor required on average in a given society at a given stage of development.

But let us return to the capitalist and the laborer. When we left them, the capitalist was about to hire the dispossessed laborer in order to obtain free labor from him. This is done thanks to the special nature of the commodity labor-power. Like every other commodity, its value is determined by the labor expended in its creation, i.e., the cost to create and maintain the laborer's ability to work. (Thus doctors are paid more than farmhands because, as a rule, far more labor has gone into the doctors' education, etc.) But unlike any other commodity, labor-power, when used by the capitalist, creates value. Now imagine that the value of an autoworker's labor-power comes out to 200 dollars a day. This will be paid to the autoworker as a wage. What does the capitalist receive in turn? First, he makes sure that his laborer adds 200 dollars worth of value to the raw materials he has inside of his factory. Let us further imagine that this is done in four hours. After these four hours, the worker has given the capitalist 200 dollars worth of value -- a fair exchange, considering that the worker will receive 200 dollars for his day's work. Is the worker free to return home now? Heavens, no! The worker must remained dungeoned up in the hellish factory for another four or six or eight hours, during which time all the value he creates is simply appropriated by the capitalist. This is surplus-value, value created above and beyond the value he received in the form of wages for his work. The production of surplus-value is the entire goal of the capitalist system.

Now, with this as our basis, we've already gone far beyond Moore (or rather Wallace Shawn's) tepid attempt at defining capitalism. We know that there is no divide between the capitalism of the 50s, capitalism of the 70s, and capitalism of today. It's all based on the exploitation of wage-labor in the production of commodities (and all that that means, from wars to repression to environmental destruction).

Moreover, unlike Moore and the leftist mouthpieces of capital, we need not look for the alpha and the omega of capitalist crisis in the bad behavior on the part of the plunderbund's leading figures. Deregulation, debt, and financialization were just strategies for the capitalists (and the capitalist state) to cope with the larger crisis of capitalism. For as it turns out capitalism is not essentially static so long as politicians, capitalists, trade unions, or other bogeymen don't mess it up. Capitalist production invariably leads to crises. (19th century economists recognized that capitalism crisis-prone, though they denied that crises were the fault of capitalism's logic; thus, one 19th century economist blamed the periodic crashes and busts of capitalism to sun spots -- a scapegoat capitalism's defenders have now revived to explain away climate change.)

First, the value congealed in commodities is realized as monetary profit unless these commodities can be sold on the market. A capitalist has a warehouse full of shoes, imagine, in which each shoe's value composition can be divided into one third raw materials, one third the wages paid the worker, and one third the surplus value obtained from the laborer's unpaid work. But unless the capitalist can exchange these shoes for money or some other commodity, that surplus value does him no good, and its creation was a waste of money, since now 100% of his outlays and all of his profits are locked up in some heavily guarded warehouse. Now, as we've seen, capitalism's whole goal is the production of surplus-value rather than meeting human needs. As such, capitalists will flock to industries where profits are great without much thought to demand. Accordingly, crises of overproduction were very common since the inception of capitalism. What's more, since workers -- who by and large are the main consumers in capitalist society -- only receive a fraction of the value they produce, more value is produced that can ever be bought. Some have pointed to the disappearance of non-capitalist markets that can serve as outlets for these goods as another kind of overproduction crisis. As mentioned above, Moore seems to inch towards overproduction as an explanation of the wage-cuts and turn to financialization beginning in the 70s, but in the end says no more about it. As mentioned above, Moore seems to inch towards overproduction as an explanation of the wage-cuts and turn to financialization beginning in the 70s, but in the end says no more about it.

Second, competition in capitalist society leads to the use of ever more productive machinery. Because the value of a product is equivalent to the socially necessary labor time embodied in it, the capitalists who can produce commodities faster, thanks to the use of more machinery, are in a position to realize a handsome profit. Over time, the less productive capitals either die off or modernize, and so the average quantity of labor in a given commodity decreases. Thus there is a tendency for the rate of profit to fall over time, which was not lost on Marx or those who have followed the investigative path he blazed.

We can now see just how shallow Moore's economic thinking is. He presents the "deindustrialization" of America in the 80s as a dastardly conspiracy by corporate America and its friends in the White House to secure short term profits no matter the cost. But with a few paragraphs of instruction in the true nature of the capitalist economy, we can see that capital's flight to finance and debt was not a choice but a necessity. While Moore is right in pointing to the finance sector as the epicenter of this latest crises, he's wholly wrong to believe that a return to the capitalism of the 1950s is a solution -- since it was this very same beloved capitalism that contained the seeds of decline that led to the current impasse -- or even a possibility. The turn to financial speculation and debt is a symptom, not the cause, of the crisis.

This inability to come to grips with capitalism is the source of every error in Moore's movie. Take, for instance, his idealized description of the prosperity of his family during the 1950s. Love this capitalism as he might, it was still predicated on the exploitation of wage labor; if workers were paid well, it's only because they were making their bosses that much richer. As soon as profits declined -- as surely they must -- the capitalists were forced by the lash of competition to attack the wages and living standards of the workers. (To his credit, Moore acknowledges that this relative prosperity for American workers wasn't incompatible with racial segregation and brutal imperialist wars.) He drops the ball elsewhere, too. At one point in the movie, Wallace Shawn laments that in the last decade capitalists stopped "producing the things that everyone loves" and began speculating. Trouble is, capitalists don't set out to "produce the things that everyone loves" -- they produce what they can sell at a profit. This is obvious to starving people, who obviously would love food but never see it, not now and not in the golden age of capitalism in which Shawn's capitalists produced their lovable widgets.

Furthermore, Moore completely mistakes the nature of labor unions. Throughout the movie unions are represented as the guarantors of prosperity for the working class and as a counterweight to the power of the capitalists. In reality, while unions were once organizations of the working class, in the 20th century economic gains on the terms of the working class were no longer possible. Unions were permitted only as the guarantors of social peace in the factories. Strikes were permitted but only to avoid wildcats and unplanned work stoppages (contracts usually demanded that unions warn the company in advance of any strikes, which enabled the company to adjust its production to avoid losses). Higher wages were granted for the same reason. It is no accident that Franklin Roosevelt's push to extend the legal rights of unions came during the massive strike-wave of 1933-1934. As Anton Pannekoek said at the time, "the capitalist class itself recognized that trade unions are necessary to direct the revolt of the workers into regular channels to prevent them from breaking out in sudden explosions." Sixty years later, the head of the French employers' association said "we have everything to lose if the unions become weaker still ... and so we have to find ways of keeping their heads above water." The capitalists understand that the unions are their allies. Many workers who have been in unions see that as well. Why can't the left, from Moore to the Trotskyists, see the same?

Moore also fails to understand that capitalism can exist even if you get rid of the foremen and, yes, even individual capitalists. In one part of the film, he stops by a factory which is owned and operated by workers. He tells us this kind of ownership isn't "some bullshit stock option... they're the true owners." This, he claims, "takes money out of the equation." He has ventured into the absurd with this statement! Even a child could see that the workers are still producing commodities for exchange on the market for money! Moreover, in doing so, they're forced to compete with other enterprises (self-owned or not). As Rosa Luxemburg wrote almost a century ago, this competition means the workers are "faced with the contradictory necessity of governing themselves with the utmost absolutism. They are obliged to take toward themselves the role of capitalist entrepreneur -- a contradiction which accounts for the usual failure of production cooperatives, which either become pure capitalist enterprises or, if the workers' interests continue to predominate, end by dissolving." For all the talk of "factories without bosses," the leftists forget the simple truth that the laws of capitalism are the ultimate, inescapable boss.

Moore's economics are bad, but it's in the realm of politics where he entertains the most dangerous delusions. He claims that it was only with the election of Reagan in 1980 that Wall Street embarked on a plan to "make America serve them." Unsurprisingly, this narrow vision of what it means for the state to serve the ruling class translates into a belief that Obama's election somehow threatened the capitalists' interests. Of Obama's campaign, Moore says, "Holy Shit! This was not what Wall Street wanted. What if he won? What would happen to their way of life?" Moore presents the first days after Obama's election as a "the beginning of a worker's revolt against wall street," pointing to the mayor of Detroit's decision to end the eviction of owners of foreclosed homes and support from politicians for the workers at Republic Windows and Doors who were staging a sit-down strike to win severance pay.

But Moore's initial exuberance was misplaced, he concedes. For our director, it was Obama's support for bailout bills that showed Obama as a friend to big business. Moore explains this "shift" as the result of corporations "buying" Obama by financing his election campaign. (That maybe they supported him because his politics best matched theirs isn't considered.) Because Moore resorts to this simplest of explanations, he can't come up with a reasonable solution to the obvious fact that the state is on the side of the rich. Even Adam Smith, the prophet of capitalism, saw this 200 years ago: "Civil government, as far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all." Despite centuries of evidence that the state is not a neutral instrument of society at large, Moore still claims that the only way to challenge the rich is to return to the ballot booths and remember the phrase "one man, one vote." Moore even manages to drum up some right-wing writer for a financial paper who states his own uneasiness about democracy -- as if this proves that the ballot is a threat to capitalism! (I wonder what Moore has to say about billionaire William Louis-Dreyfus's efforts to enlist the ultra-wealthy in a campaign to protect voting rights?)

But here's a question for Moore: if democracy and voting were all that were required to break the capitalists' grip on political power, then why hasn't such a thing happened in all of history? Is it perhaps because democracy, far from being the capitalist class's nightmare, is actually the perfect ideological reflection of capitalist society? Just as individuals appear to confront each other in the economy as isolated, equal commodity sellers, so with democracy individuals are reduced to the level of citizens, isolated individuals with the same rights and the same say in representation. The very notions of democracy, freedom, and equality are based on commodity exchange, as Marx writes in his Grundrisse:

Out of the act of exchange itself, the individual, each one of them, is reflected in himself as its exclusive and dominant (determinant) subject. With that, then, the complete freedom of the individual is posited: voluntary transaction; no force on either side; positing of the self as means, or as serving, only as means, in order to posit the self as end in itself, as dominant and primary; finally, the self-seeking interest which brings nothing of a higher order to realization; the other is also recognized and acknowledged as one who likewise realizes his self-seeking interest, so that both know that the common interest exists only in the duality, many-sidedness, and autonomous development of the exchanges between self-seeking interests. The general interest is precisely the generality of self-seeking interests. Therefore, when the economic form, exchange, posits the all-sided equality of its subjects, then the content, the individual as well as the objective material which drives towards the exchange, is freedom. Equality and freedom are thus not only respected in exchange based on exchange values but, also, the exchange of exchange values is the productive, real basis of all equality and freedom. As pure ideas they are merely the idealized expressions of this basis; as developed in juridical, political, social relations, they are merely this basis to a higher power.

But these pure, hallowed ideas obscure the deeper reality:

In present bourgeois society as a whole, this positing of prices and their circulation etc. appears as the surface process, beneath which, however, in the depths, entirely different processes go on, in which this apparent individual equality and liberty disappear. It is forgotten, on one side, that the presupposition of exchange value, as the objective basis of the whole of the system of production, already in itself implies compulsion over the individual, since his immediate product is not a product for him, but only becomes such in the social process, and since it must take on this general but nevertheless external form; and that the individual has an existence only as a producer of exchange value, hence that the whole negation of his natural existence is already implied; that he is therefore entirely determined by society; that this further presupposes a division of labour etc., in which the individual is already posited in relations other than that of mere exchanger, etc. That therefore this presupposition by no means arises either out of the individual's will or out of the immediate nature of the individual, but that it is, rather, historical, and posits the individual as already determined by society. It is forgotten, on the other side, that these higher forms, in which exchange, or the relations of production which realize themselves in it, are now posited, do not by any means stand still in this simple form where the highest distinction which occurs is a formal and hence irrelevant one. What is overlooked, finally, is that already the simple forms of exchange value and of money latently contain the opposition between labour and capital etc. Thus, what all this wisdom comes down to is the attempt to stick fast at the simplest economic relations, which, conceived by themselves, are pure abstractions...

Or, as Anton Pannekoek put it rather more succinctly in Workers' Councils:

The inner untruthfulness of political democracy is not an artful trick invented by deceitful politicians. It is the reflection, hence an instinctive consequence, of the inner contradictions of the capitalist system. Capitalism is based upon the equality of citizens, private owners, free to sell their commodities--the capitalists sell the products, the workers sell their labor power. By thus acting as free and equal bargainers they find exploitation and class antagonism as the result: the capitalist master and exploiter, the worker actually the slave. Not by violating the principle of juridical equality, but by acting according to it the result is a situation that actually is its violation. This is the inner contradiction of capitalist production, indicating that it can be only a transition system. So it can give no surprise that the same contradiction appears in its political form.

Economics and politics are thus mirrors in which the fictions of both reinforce each other. Apparent freedom in economics is the basis for the apparent freedom in politics, and vice-versa. In both cases the outward appearance is equality, but the reality is inequality.

As in the realm of production, complete freedom and equality in the sphere of politics is seen as an illusion once we move beyond the "simplest relations, which, conceived by themselves, are pure abstractions." In reality, despite the apparent equality of all citizens, the minuscule class of capitalists always has the better of politics in capitalist society. There are a few reasons for this.

First, the capitalists' control of the media and their tremendous influence on the education system ensure that their candidates are at a disproportionate advantage. Thus while the phrase "one man, one vote" may accurately describe the democratic electoral system, it neglects to account for how the casting of those votes is determined. Second is the fact that politicians cannot simply act by their own will. Say that to Moore's delight the American public overwhelmingly votes for a populist candidate who pledges to raise taxes on the rich and increase wages. Should this candidate attempt to turn these pledges into policy, capital will of necessity seek greener pastures and safer harbors. Now, what do we care that those inveterate parasites are inconvenienced? In fact, we care very little save for the fact that with them and their money would go jobs, tax revenue, and so on, until the reforming policies of our newly elected leader became a threat to the national economy and even the health of the state. No matter his sympathies, no politician could tolerate that. Just such a thing happened in France in the early 80s when the "Socialist" Mitterrand was elected on a strongly left-wing platform. Within a matter of years, with the economy in shambles and capital fleeing abroad, Mitterrand was forced to adopt the policies of the arch-conservatives Reagan and Thatcher despite his own political proclivities. Finally, the workers' own reverence for democracy is a major stumbling block. Only through understanding its ideological basis, outlined above, will workers be ready to confront the capitalists and their state. Far from contributing to such a clarification, Moore only adds to the mystification of democracy.

The final great mistake of Capitalism: A Love Story is Moore's presentation of socialism, which is based on a conception equally as flawed as his conception of capitalism.

When Capitalism: A Love Story was first revealed, conservatives happily decried Moore as a socialist and relished in the supposed contradiction of a rich man attacking capitalism (perhaps not realizing that hypocrisy and contradiction are two different things). But by the end of the movie, it's clear that Moore's no socialist. Moore misidentifies and conflates socialism with both Stalinism and Social democracy. When Moore shows a clip of Joe the Plumber decrying Obama's "socialist policies," he follows it up with a clip of Mao and Stalin reviewing their armed goons. Shortly thereafter, however, we're supposed to forget that definition of socialism -- after all, there's "actually a socialist in the Senate," Moore informs us. He then cuts to Bernie Sanders, the Vermont Senator who runs as an independent but caucuses with the Democrats. In a short interview with Moore, Sanders serves up pablum about the government needing to "represent middle income and working people rather than just the wealthy and powerful."

All that these two pathetic caricatures of socialism have in common is that they both call for a more powerful state to intervene in, or run, an economy based on wage labor and commodity production; in a word, both are state capitalist ideologies. Moore sides with the "socialism" -- in actuality, just watered-down European social democracy -- of Sanders. Accordingly, Moore never once advances a genuinely socialist agenda, which would mean calling for the working class to seize power from the capitalists, to institute its own dictatorship with the aim of abolishing private property and capitalist social relations based on production for profit. Rather, in the end all that Moore (like Sanders) can think to demand is for the state to do the impossible: to return capitalism, by way of regulation, to the conditions which existed at the beginning of its last boom, to the conditions of the 50s and 60s.

At every turn in the movie, Moore's fundamental confusion about the nature of capitalism, detailed broadly in the above review, leads to errors, misinterpretations, and ultimately quixotic demands for reform (rather than a clear demand for revolution). Despite some good content, Moore's latest documentary has the rare misfortune of being a work that lives up to its billing and thus being the worse for it: this really is a love story. However tortured Moore's love for capitalism is, it's clear he can't envision a world without it.