Consumers in Capitalism

Before I address the issue of “ethical consumption” in my next post, I need to take on the topic of consumption itself.

According to neoclassical economics, a consumer is an informed individual, making rational decisions in the marketplace to maximize his/her self-interest. There’s no surplus, growth is an accident of production, and capital comes from investors beating the odds for a while. Workers and owners are just temporary categories; we’re really just individuals who come to market to meet our infinite needs, and some of us are lucky enough have extra cash on hand to sell goods to others. By demonstrating a preference for particular goods, consumers can change the way those goods are produced and distributed.

In reality, this doesn’t describe most people, who consume according to standard patterns, socialized through culture and family. However, it does describe capitalists, who come to the market as a purchaser (consumer) of labor power.

Neoclassical economics focuses on consumers, but this reflects reality only for the capitalist. Any economic theory beginning with consumers, consumption, or exchange adopts the capitalist’s point of view. This is flawed in two ways:

  1. Wages don’t create all demand: they’re just one way for capitalists to realize the capital invested in commodities. There are three other circuits that supply public and private goods at all stages of production. Most people encounter the market when they shop, so it seems natural to think that capitalism exists to satisfy their consumer needs. But while the market in consumer goods is constantly on display, exploitation is hidden. Workers matter only as providers of labor power, the source of surplus value: they’re only able to receive and spend a wage if their employer makes a profit first. Moreover, capitalists also create commodities (the means of production), that only other capitalists buy. For example: steel producers buy coal to make steel; manufacturers of coal-mining equipment buy steel to produce mining equipment; mine owners buy mining equipment to mine coal, that they then sell to steel producers. There are enormous areas of the economy where workers’ spending power has no impact at all.
  2. Money capital funds every circuit: it not only provides start-up capital but helps workers’ wages circulate by providing personal credit, increasing capital through banks and corporate self-financing. New forms of credit continue to spawn, both because industries self-finance, and because speculators can suck up surplus value that can’t be reinvested profitably. To influence this process, consumers would have to find some way of controlling investment decisions at all stages of capital circulation, including private investment and state purchase of goods. Otherwise, capitalists would pull investment dollars from the more expensive, less technically-developed, ethical local industries.

Consumer spending is a form of distribution, it represents the reproduction of workers’ own labor power, not control over the entire process. The idea that workers could control the circuit of capital repeats Ricardo’s error by assuming workers receive the full value of their labor, rather than the value of their labor power in production. Even if localist advocates convinced all workers that local consumption could change the world, workers could, at best, change the conditions of production for their own housing and durable goods, a small portion of the overall capital circuit.

Localism and Community

[F]aced with the unpalatable conclusion that small alternatives won’t out-compete or destroy capitalism, localists cling to a fierce faith in communities to band together and do it yourself.

Localists yearn for community, freed from the uniform mediocrity of anonymous, corporate-controlled spaces. However, the petite bourgeoisie’s way of life precludes a community, since members of the class rely mainly on themselves for economic progress and emotional support. Community members are either fellow petite bourgeois competitors or customers demanding lower prices. Perhaps this is why so many localists have such a strong nostalgia for community as an ideal place where business happens and values take shape. Farmers markets aren’t just a place to shop, but a place to socialize: since “consumers have ten times as many conversations at farmers’ markets as the do at supermarkets… You go from being a mere consumer to being a participant.”

Why do localists want their shopping trips to include personal conversation? Alternately, you could appreciate the anonymity and speed of supermarket transaction if you have other ways to socialize. But it makes sense that the petite bourgeois, trying desperately to succeed in the marketplace or gain control on their own merits, would feel lonely. They try to re-forge the social connections lost in the marketplace in the same individual way they advance. Consumption is where they compete to achieve the symbols of habitus. The desire for friendly consumption is as close as the petite bourgeois get to stepping outside their daily antagonisms.

Just as ideology is a single class’s way of life generalized to all of society, community for the petite bourgeois becomes community for them alone. Wendell Berry criticizes corporations, governments and schools for concealing a “private aim (which) has been to reduce radically the number of people who, by the measure of our historical ideals, might be thought successful: the self-employed, the owners of small businesses or small usable properties, those who work at home.” This persecution of petty capitalists sets local community advocates against “Communists and capitalists (who) are alike in their contempt for country people, country life, and country places. They have exploited the countryside with equal greed and disregard.” The local community are “small farmers, ranchers, and market gardeners; worried consumers; owners and employees of small businesses; self-employed people; religious people; and conservationists.”

The inference is clear: the working class isn’t part of the community. [Emphasis mine.] The images are of the town square, the main street where everyone knows your name, the butcher, baker and small shopkeeper. These evoke market towns where residents distributed commodities made elsewhere. In contrast, industrial towns were often centers of intense class struggle between owners and workers. Not coincidentally, industrial towns created close community networks forged in that struggle. These close-knit communities of workers also demonstrated all the values of collective self-sacrifice, yet localists never mention them, preferring fuzzy invocations of consumerist fantasy.

The problem lies in how malleable the term community is, including capital, the state, and workers — groups whose interests are fundamentally at odds. By suggesting workers are at most another group making demands on the state, the designation of community hides power relations. It replaces class with innumerable differences of income, culture and other sociological categories, bounded by geography rather than a common exploitation. This blurring of conflict is fundamental to localism. By invoking community, localism attempts the political equivalent of Proudhon’s fair markets for small artisans, imposing a false social peace by eliminating the working class rhetorically.


Greg Sharzer, No Local: Why Small-Scale Alternatives Won’t Change The World (Winchester, UK: Zero Books, 2012), 98–101.

Left Forum 2013

If you’ve been reading this blog this past month, you probably noticed the announcement for the Left Forum in the right column. It’s gone now, because this past weekend was the event.

I didn’t go last year. After going every year for almost twenty years, I stopped, for many reasons. One is that it’s always the same people, saying the same things, year after year. Another is that the panels are more tepid than they were when I started going. Still another reason is that, between web sites and mailing lists, I can find just about any information I need. These conferences used to be more informational for me than they are today. (About this: during the break in Sunday’s session, I was eating lunch at Subway with a friend of mine, when an older man came into the place. He saw our name badges and started talking to us, telling us that this was the first Left Forum he’s been to and what a fantastic thing it was. He was almost ecstatic, and I realized that while I may be tired of aspects of it, there are people for whom this is a really good thing.)

Add to this the distress I was experiencing for not having completed “East Village” Ideology, that I wrote about in Howl, and How A Quilas Piece Comes To Be, and I just wasn’t motivated to go, despite having received an email wherein it was written that if people volunteered to videotape two panels, they could get in for free. (Eventually, the “free” thing won out, and I decided to go.)

I taped six panels, even though I was only required to tape two. I figured since I’m already there with my camera, why not? I’m going to put up clips of each, once I’m done editing them, but for now, the panels I chose, and a bit of commentary on them, are:

Primitive Accumulation in Light of the Current Onslaught of Austerity — One of the benefits of taping the panels was that I didn’t need to take notes. Unfortunately, that means I have nothing now to refer to. The thrust of this panel was that primitive accumulation still continues, that it’s always continued throughout the history of capitalism, and that it did not refer to one period of pre- to nascent-capitalist development, that theft and plundering have always accompanied capitalism.

Wall Street’s War to Impose Austerity — There was almost nothing about Wall Street or austerity. The majority of the discussion was about Henry George, and Henry George University (where two of the panelists taught), and Georgists. This was supposed to be about U.S. finance capital pushing the agenda that is playing out in Greece today. I agree with Michael Hudson that Marxists have no rapport with Georgists, so why were they there? It’s bad enough that they still debate anarchists and Proudhonists, as if these arguments have never been resolved, but do we need to rehash debates with libertarians, of all people?

The Future of Education Reform — The education panels are usually interesting, since I have a child in a New York public school. Even though I heard nothing new at this one (this is an example of keeping up through blogs, web sites, etc.), I was able to get information from people I’ll contact next year to arrange for speakers at my son’s school. Two of the panelists were active in the United Federation of Teachers, one of them in the MORE caucus; one was in the Chicago Teacher’s Union caucus CORE; and the fourth was a writer for the Brooklyn Rail.

Marx’s Politics of Revolution: From the Critique of Proudhon to the Critique of the Gotha Program — I chose this one because of my recent focus on petite bourgeois responses to capitalist crises, but nothing new came out of it for me. It’s one of those panels where the question “Was there an epistemological break in Marx’s writing?” picks up where it left off last year, everything said before is said again, with the understanding that they will continue the discussion at the next conference.

Public Resource Theft: Lessons of New Orleans Public Housing for NYC — Again, nothing new, but I did get more contact information. Except for the people from New Orleans, everyone in the room was from my neighborhood and focussed on the NYCHA Infill proposal. A demonstration opposing this is being planned for October 19. I’ll post more on that when the time comes and I have more information.

Dialectal Materialism vs. The New Physics — Far and away the most interesting panel of the weekend! As soon as I saw this title in the program, I knew I had to attend. What is “the new physics,” and how is it counterposed to dialectical materialism? (My nephew just graduated from Carnegie Mellon University with a degree in Physics. I asked him if he knew anything about this antagonism. He didn’t. Perhaps it’s a graduate-level discussion?) By “new,” it turns out they meant 20th-century physics! Mike Gimbell spoke first. There were two main tacks taken in his talk: 1) the political — “Relativity theory was thrust forward in the ruling class’s fight against Communism;” and 2) the scientific — “Relativity Theory is an attack on basic physical laws.” Instead of describing it, I will show you a clip:

(Auto-focus isn’t always what it’s cracked up to be.)

Gentrification Is Not Neutral

There’s a documentary called “Gut Renovation” that released last year, that I read about on another blog, that tells the story of the film-maker, Su Friedrich, who moved into a loft space in Williamsburg many years ago, fixed it up, and then became incensed when the zoning laws were changed in 2005 to allow towering condos to be built, which eventually drove her out of the neighborhood. Her anger is understandable: she and others had created a living-space, and helped repurpose a neighborhood, that appealed to them (I don’t know if it appealed to those who were living there before she arrived). Her wrath is directed at that the new developers and residents: the gentrifiers.

But Su Friedrich was a gentrifier. Owner/occupiers are gentrifiers, the same as any others, qua gentrifiers. They’re oftentimes the first, and most persistent, since they’re able to either work within existing zoning laws, or more easily evade them.

So this, added to all of my reading and writing on gentrification lately, had me wondering: is it possible that gentrification is neutral? All buildings have a lifespan. All buildings will require significant renovations, or even razing, at some point. Most buildings in a neighborhood ripe for gentrification are of approximately the same age, which means that they will have deteriorated at about the same pace, and require renovation at about the same time. Even if the cheapest materials are used, the result will be a building with a higher-capitalized ground rent than what preceded it. Is it even possible to renovate the buildings in an area without making it unaffordable for those already living there? That is, without gentrifying it?

I was puzzling this while walking to work one day when it finally came to me, or came back to me rather, as I had already stated the problem in a response to a comment on Follow the Money. These options — ungentrified, devalorized neighborhood vs. gentrified, unaffordable neighborhood; quaint, gentrified block vs. over-built, gentrified block — are what we’re limited to when the root of the problem, capitalism, remains outside of the discussion. When housing is an exchange-value instead of a use-value, it’s clear that gentrification is not neutral.

Acting within this straightjacket, a strategy has arisen to prevent the proliferation of luxury towers and franchise stores by restricting what can be razed, or be permitted to open, within an area. This is really the crux: this action will not halt the advance of gentrification, only the direction it takes. One’s preference matters only to this degree. High-rises, or single-family townhouses? Starbucks, or Bluebird Coffee Shop?

When one group of gentrifiers does battle with another group, why take sides? Our gut reaction might be to oppose the large real estate developers, but that doesn’t mean we should side with those actively involved in the same process. Fossilized neighborhoods are no more appealing than glass and concrete neighborhoods. The Lower East Side Tenement Museum should not be the entire Lower East Side.


Richard Wolff Follow-up on Bill Moyers

“Capitalism is a system geared up to doing three things on the part of business: get more profits, grow your company and get a larger market share… If along the way they have to sacrifice either the well-being of their workers or the well-being of the planet or the environmental conditions, they may feel very bad about it — and I know plenty who do — but they have no choice.”