Capitalism is a System of Debt

This line, that "the free enterprise system and the free market"--also known as capitalism--is a panacea to poverty is repeated ad nauseam. These words are a good lead-in to criticism of anything from "big government" to "internationalism". They are often followed with historical statistics of famine, GDP estimates of “nations in need of more capitalism”, and blanket criticism of humanity's past.

The line ignores the fact however, that this "effective machine" runs on debt. Debt, not only in the form of money owed to foreign, state, and local governments, individuals, corporations, big and small public institutions, bondholders, and owners of cash, but also to future generations and indigenous peoples.

The period that showed the “greatest improvement in the lot of the ordinary man” has also seen the elimination of much of the Amazon jungle, the Great Barrier Reef, the Arctic ice, and Earth’s petroleum reserves. We owe the future generations these experiences and resources. It is unclear whether we can honor that debt.

The period that has allowed the American poor to live at GDP levels above the Chinese farmer has also seen the appearance of the Great Pacific garbage patch, industrial genocide, and nuclear weapons. We haven’t come up with a schedule to service these debts, but continue to draw credit from a blind future.

European and American supremacy, the backbone of capitalism’s sweep of the last two centuries, was financed with the land, resources, and labor of the rest of the world. This debt, which remains unpaid, is why the indigenous peoples of the world remain in bonded labor, is why a cocoa farmer in Ghana can never taste chocolate, and is why a gathering of Lakota tribes on treaty lands can be evicted by the police.

The global debt racked up by capitalism is, of course, never counted by the bean counters of capitalism, who tell us that the “experts” will worry about the debt-to-GDP, price-to-earnings, and return-on-investment ratios, and we—lay followers of capitalism—can go on with business as usual. Producing a nuclear weapon contributes more to the national GDP than tending a backyard vegetable garden, but one creates liability for the children, the other creates assets.

Modern civilization, the most effective wealth creation machine in history, is the most effective machine for transferring the value of the poor, the indigenous, and the unborn to the rich and powerful of the present. The average income of the pre-industrial farmer was lower than that of the American poor, but their credit score, assessed with a longer, broader scope, was a lot better. The rich, with their golden credit and platinum assets, will repeat their mantras until the sea-level rises or the people do.