Sunday, October 7, 2007

Thoughts on Che Guevara and the cruelty of capitalism

The pain and cruelty generated by the free market and capitalism is no single person’s fault. As most people will tell you, it is the “invisible hand” more efficiently balancing supply and demand, including the demand and supply of factors of production, even if one of those factors - human beings - can often feel pain, joblessness, insecurity, and powerlessness.

The capitalist world at large absolves itself from the pain and cruelty by blaming it on “the system”. It is the way things are, and sorry you just lucked out. Sorry you lucked out and lost your job when some US companies decided to send your job to India or China, because they were only following capitalist principles of finding the lowest cost factor of production.

You could take some cold comfort in the theory that this is just a structural adjustment, and that progressively the American economy will move to higher value-added jobs, for which incidentally you were never skilled. Tell that to your hungry kids when they are whining for the food you can no longer put on the table.

The Indians and the Chinese are now on a spending spree, yes on acquired tastes like Cabernet and caviar, and all things branded. The American worker should not crib, apologists say, because they are these days buying all things American, and helping boost the US economy. Unfortunately all things American are not longer manufactured in the US, but in China.

Take ten years from now, Indian workers, including software engineers may also find their jobs on the block, as companies move to lower cost locations, or expand to other markets. Once again the theorists of capitalism will tell them that their pain, their powerlessness are only temporary effects of a structural change.

Have you ever wondered why the Latin American revolutionary Che Guevara inspires many people in a vague sort of a way, even 40 years after his death ? It is not that these people support Marxism, or for that matter some of Che Guevara’s controversial actions, including his summary executions of supporters of General Fulgencio Batista in Cuba after the Marxists seized power in 1959.

Che Guevara and revolutionaries like him strike a mild sympathetic chord in many of us, because despite the odds, they did what we may never do.

Instead of being powerless victims of a cruel system, they chose to question and to overthrow the feudalism coupled with neo-capitalism in parts of South America. And they were not alone. In other countries around the world too there have been people who have stood out to fight systems that are unjust and oppressive.

Today it may be the turn of people in capitalist societies, aiming to restore their power and autonomy. As citizens, people have the right to influence the political process so that the wealth that is generated is distributed more equitably, and people are empowered.

This is not about overthrowing the capitalist system. It is not about “economic populism” which Alan Greenspan, former chairman of the US Federal Reserve Board, says has caused many an economic disaster in Latin America. This is about moderating the system – getting governments to spend more on the welfare of their people, getting capitalism to get less rapaciously greedy, and protecting vulnerable sections of society who have neither the skills nor the capital to compete.

Take the plight of workers in capitalist economies. Currently in most of these economies, if the CEO of a company cuts staff, the company’s shares spike on the stock market, and later the CEO’s salary also jumps. The CEO can now keep fewer staff and make them work longer, many of them driven by the fear that their jobs could be lost. The CEO and his top management have benefited, and so have the shareholder, and you as the consumer. But you as a worker are out of a job, no longer able to participate in the orgy of consumption.

Do companies have to maximize profit at the expense of workers, or are they doing so mainly because a lot of industries are not unionized ? The pet argument is that if CEOs are not given the freedom to do as they please, they will lose out to competing companies. Lost in this dogma is the possibility that you can still pay and treat your people better, without making your products costlier, and still winning in the market. You can do that by shooting for reasonable profits, rather than exorbitant profits !

If the stock market would put less pressure on CEOs to generate profits, CEOs could continue to please the consumer, and yes, even the worker. CEOs may even allow trade unions and higher worker empowerment.

The cult of equity, and the celebrity status accorded to CEOs who help drive that stock up, has also translated into wide disparities between the salaries and perks of the CEO and his top management and the rest of the organization. Can’t that gap be perhaps reduced, so that the rest of the organization also benefits from capitalism ?

Apologists for capitalism will say that the key strength of capitalism is that you too can strive to be CEO. That line is cold comfort to the unemployed guy on the dole. Others will say that the outrageous salaries earned by CEOs and top management are an incentive to perform. Pray do only CEOs need an incentive to work ? What about the stiff who catches a bus or train to work each day, with nothing to look forward to except his daily routine ?

Nothing about what has been outlined so far is fool-proof. It may not work, or there may be people who don’t want it to work. But it is only by thinking of empowerment, thinking of humanizing the system, and organizing around these principles, that the process of change can begin.

Che Guevara is more than a handsome face on a T-shirt. His example dares us to dream of empowerment, of taking control of our lives.

Marxism may be dead as an ideology, but revolutionaries like Che Guevara can inspire us to think about ways of countering our powerlessness in a capitalist system.

Related article:

Free markets do not necessarily mean democracy or quality of life

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