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Criticism of capitalism typically ranges from expressing disagreement with particular aspects or outcomes of capitalism to rejecting the principles of the capitalist system in its entirety. Criticism comes from various political and philosophical approaches, including anarchist, socialist, religious, and nationalist viewpoints. Some believe that capitalism can only be overcome through revolution while others believe that structural change can come slowly through Reformism. Some critics believe there are merits in capitalism and wish to balance it with some form of social control, typically through government regulation (e.g. the social market movement).
Prominent among critiques of capitalism are accusations that capitalism is inherently exploitative, alienating, unstable, unsustainable, and creates massive economic inequality, commodifies people, is Plutocracy, leads to an erosion of human rights and national sovereignty while it incentivises imperialist expansion and war, and that it benefits a small minority at the expense of the majority of the population. There are also criticisms from environmental scientists and activists, leftists, Degrowth and others, that it depletes resources, causes Climate change, biodiversity loss, Topsoil loss, Eutrophication, and generates massive amounts of Pollution and waste.
Within anarchism, there emerged a critique of wage slavery which refers to a situation perceived as quasi-voluntary slavery, where a person's livelihood depends on , especially when the dependence is total and immediate. It is a connotation term used to draw an analogy between slavery and wage labor by focusing on similarities between owning and employment a person. The term "wage slavery" has been used to criticize economic exploitation and social stratification, with the former seen primarily as unequal bargaining power between labor and capital (particularly when workers are paid comparatively low wages, e.g. in sweatshops) and the latter as a lack of workers' self-management, fulfilling job choices and leisure in an economy.
Libertarian socialists believe if freedom is valued, then society must work towards a system in which individuals have the power to decide economic issues along with political issues. Libertarian socialists seek to replace unjustified authority with direct democracy, voluntary federation and popular autonomy in all aspects of life,Harrington, Austin, et al. Encyclopedia of Social Theory Routledge (2006) p. 50 including physical communities and economic enterprises. With the advent of the Industrial Revolution, thinkers such as Proudhon and Marx elaborated the comparison between wage labor and slavery in the context of a critique of societal property not intended for active personal use, emphasized the dehumanization brought about by machines while later Emma Goldman famously denounced wage slavery by saying: "The only difference is that you are hired slaves instead of block slaves". American anarchist Emma Goldman believed that the economic system of capitalism was incompatible with human liberty. "The only demand that property recognizes", she wrote in Anarchism and Other Essays, "is its own gluttonous appetite for greater wealth, because wealth means power; the power to subdue, to crush, to exploit, the power to enslave, to outrage, to degrade".Goldman, Emma. Anarchism and Other Essays. 3rd ed. 1917. New York: Dover Publications Inc., 1969., p. 54. She also argued that capitalism dehumanized workers, "turning the producer into a mere particle of a machine, with less will and decision than his master of steel and iron".
Noam Chomsky contends that there is little moral difference between chattel slavery and renting one's self to an owner or "wage slavery". He feels that it is an attack on personal integrity that undermines individual freedom. He holds that workers should own and control their workplace. Many libertarian socialists argue that large-scale voluntary associations should manage industrial manufacture while workers retain rights to the individual products of their labor.Lindemann, Albert S. A History of European Socialism Yale University Press (1983) p. 160 As such, they see a distinction between the concepts of "private property" and "personal possession". Whereas "private property" grants an individual exclusive control over a thing whether it is in use or not and regardless of its productive capacity, "possession" grants no rights to things that are not in use.Ely, Richard et al. 'Property and Contract in Their Relations to the Distribution of Wealth' The Macmillan Company (1914)
In addition to anarchist Benjamin Tucker's "big four" monopolies (land, money, tariffs and patents) that have emerged under capitalism, neo-mutualist economist Kevin Carson argues that the Sovereign state has also transferred wealth to the wealthy by subsidizing organizational centralization in the form of transportation and communication subsidies. He believes that Tucker overlooked this issue due to Tucker's focus on individual market transactions, whereas Carson also focuses on organizational issues. The theoretical sections of Studies in Mutualist Political Economy are presented as an attempt to integrate marginalist critiques into the labor theory of value.Kevin A. Carson, Studies in Mutualist Political Economy chs. 1–3 Carson has also been highly critical of intellectual property. The primary focus of his most recent work has been decentralized manufacturing and the informal and household economies. Carson holds that "capitalism, arising as a new class society directly from the old class society of the Middle Ages, was founded on an act of robbery as massive as the earlier Feudalism conquest of the land. It has been sustained to the present by continual state intervention to protect its system of privilege without which its survival is unimaginable".Richman, Sheldon, Libertarian Left , The American Conservative (March 2011)
Carson coined the pejorative term "vulgar libertarianism", a phrase that describes the use of a free market rhetoric in defense of corporate capitalism and economic inequality. According to Carson, the term is derived from the phrase "vulgar political economy", which Karl Marx described as an economic order that "deliberately becomes increasingly apologetic and makes strenuous attempts to talk out of existence the ideas which contain the contradictions existing".Marx, Theories of Surplus Value, III, p. 501.
In September 2018, Murtaza Hussain wrote in The Intercept about "Conservatives Against Capitalism", stating:
For all their differences, there is one key aspect of the intellectual history charted in "Conservatives Against Capitalism" that deals with an issue of shared concern on both the left and the right: the need for community. One of the grim consequences of the Social Darwinian pressures unleashed by free-market capitalism has been the destruction of networks of community, family, and professional associations in developed societies. ... These so-called intermediate institutions have historically played a vital role giving ordinary people a sense of meaning and protecting them from the structural violence of the state and the market. Their loss has led to the creation of a huge class of atomized and lonely people, cut adrift from traditional sources of support and left alone to contend with the power of impersonal economic forces.In June 2023, Bridget Ryder wrote in The European Conservative about the Degrowth, stating:
The "capitalistic era" according to Marx dates from 16th-century merchants and small urban workshops. Marx knew that wage labour existed on a modest scale for centuries before capitalist industry. For Marx, the capitalist stage of development or "bourgeois society" represented the most advanced form of social organization to date, but he also thought that the working classes would come to power in a worldwide socialism or communism transformation of human society as the end of the series of first aristocratic, then capitalist and finally working class rule was reached. The Communist Manifesto"To Marx, the problem of reconstituting society did not arise from some prescription, motivated by his personal predilections; it followed, as an iron-clad historical necessity—on the one hand, from the productive forces grown to powerful maturity; on the other, from the impossibility further to organize these forces according to the will of the law of value." — Leon Trotsky, "Marxism in our Time", 1939 (Inevitability of Socialism), WSWS.org
Following Adam Smith, Marx distinguished the use value of commodities from their exchange value in the market. According to Marx, capital is created with the purchase of commodities for the purpose of creating new commodities with an exchange value higher than the sum of the original purchases. For Marx, the use of labor power had itself become a commodity under capitalism and the exchange value of labor power, as reflected in the wage, is less than the value it produces for the capitalist.
This difference in values, he argues, constitutes surplus value, which the capitalists extract and accumulate. In his book Das Kapital, Marx argues that the capitalist mode of production is distinguished by how the owners of capital extract this surplus from workers—all prior class societies had extracted surplus labor, but capitalism was new in doing so via the sale-value of produced commodities. He argues that a core requirement of a capitalist society is that a large portion of the population must not possess sources of self-sustenance that would allow them to be independent and are instead forced to sell their labor for a wage.Karl Marx. Chapter Twenty-Five: The General Law of Capitalist Accumulation. Das Kapital.Dobb, Maurice, 1947. Studies in the Development of Capitalism. New York, International Publishers Co.David Harvey 1989 The Condition of Postmodernity
In conjunction with his criticism of capitalism was Marx's belief that the working class, due to its relationship to the means of production and numerical superiority under capitalism, would be the driving force behind the socialist revolution.Wheen, Francis. Books That Shook the World: Marx's Das Kapital • 1st , London, Atlantic Books, 2006.
In Imperialism, the Highest Stage of Capitalism (1916), Vladimir Lenin further developed Marxist theory and argued that capitalism necessarily led to monopoly capitalism and the export of capital—which he also called "imperialism"—to find new markets and resources, representing the last and highest stage of capitalism. Some 20th-century Marxian economists consider capitalism to be a social formation where capitalist class processes dominate, but are not exclusive.See, for example, the works of Stephen Resnick and Richard Wolff.
To these thinkers, capitalist class processes are simply those in which surplus labor takes the form of surplus value, usable as capital; other tendencies for utilization of labor nonetheless exist simultaneously in existing societies where capitalist processes predominate. However, other late Marxian thinkers argue that a social formation as a whole may be classed as capitalist if capitalism is the mode by which a surplus is extracted, even if this surplus is not produced by capitalist activity as when an absolute majority of the population is engaged in non-capitalist economic activity.
In Limits to Capital (1982), David Harvey outlines an overdetermined, "spatially restless" capitalism coupled with the spatiality of crisis formation and resolution.David Harvey. The Limits to Capital. Verso, 2007. Harvey used Marx's theory of crisis to aid his argument that capitalism must have its "fixes", but that we cannot predetermine what fixes will be implemented, nor in what form they will be. His work on contractions of capital accumulation and international movements of capitalist modes of production and money flows has been influential.Lawson, Victoria. Making Development Geography (Human Geography in the Making). New York: A Hodder Arnold Publication, 2007. Print. According to Harvey, capitalism creates the conditions for volatile and geographically uneven development.
Sociologists such as Ulrich Beck envisioned the society of risk as a new cultural value which saw risk as a commodity to be exchanged in globalized economies. This theory suggested that disasters and capitalist economy were inevitably entwined. Disasters allow the introduction of economic programs which otherwise would be rejected as well as decentralizing the class structure in production.Beck, U. (1992). Risk society: Towards a new modernity (Vol. 17). Sage.
The Catholic Church forbids usury. As established by papal encyclicals Rerum Novarum and Quadragesimo Anno, Catholic social teaching does not support unrestricted capitalism, primarily because it is considered part of liberalism and secondly by its nature, which goes against social justice. In 2013, Pope Francis said that more restrictions on the free market were required because the "dictatorship" of the global financial system and the "cult of money" were making people miserable.Squires, Nick (18 May 2013). Pope blames tyranny of capitalism for making people miserable. The Age. Retrieved 18 May 2013. In his encyclical Laudato si', Pope Francis denounced the role of capitalism in furthering climate change.
Islam Riba ( riba), the mode of operation of capitalist finance.Last Sermon of Muhammad given on 10 Dul-hajj 10 hijra, mentioned in all book of Hadith. Sahih Bukhari mentions parts of it. Musnad Imam Ahmed recorded the longest and complete speech.
Socialists argue that capitalism consists of irrational activity, such as the purchasing of commodities only to sell at a later time when their price appreciates (known as speculation), rather than for consumption. Therefore, a crucial criticism often made by socialists is that making money, or accumulation of capital, does not correspond to the satisfaction of demand (the production of ). Let's produce for use, not profit. Retrieved 7 August 2010, from worldsocialism.org: The fundamental criterion for economic activity in capitalism is the accumulation of capital for reinvestment in production. This spurs the development of new, non-productive industries that do not produce use-value and only exist to keep the accumulation process afloat. An example of a non-productive industry is the Financialization, which contributes to the formation of economic bubbles.
Socialists view private property relations as limiting the potential of productive forces in the economy. According to socialists, private property becomes obsolete when it concentrates into centralized, socialized institutions based on private appropriation of revenue (but based on cooperative work and internal planning in allocation of inputs) until the role of the capitalist becomes redundant.Engels, Fredrich. Socialism: Utopian and Scientific. Retrieved 30 October 2010, from Marxists.org: http://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm, "The bourgeoisie demonstrated to be a superfluous class. All its social functions are now performed by salaried employees." With no need for capital accumulation and a class of owners, private property of the means of production is perceived as being an outdated form of economic organization that should be replaced by a free association of individuals based on public or common ownership of these socialized assets. The Political Economy of Socialism, by Horvat, Branko. 1982. Chapter 1: Capitalism, The General Pattern of Capitalist Development (pp. 15–20)Marx and Engels Selected Works, Lawrence and Wishart, 1968, p. 40. Capitalist property relations put a "fetter" on the productive forces. Private ownership imposes constraints on planning, leading to uncoordinated economic decisions that result in business fluctuations, unemployment and a tremendous waste of material resources during crisis of overproduction. The Political Economy of Socialism, by Horvat, Branko. 1982. (p. 197)
Excessive disparities in income distribution lead to social instability and require costly corrective measures in the form of redistributive taxation. This incurs heavy administrative costs while weakening the incentive to work, inviting dishonesty and increasing the likelihood of tax evasion (the corrective measures) while reducing the overall efficiency of the market economy. The Political Economy of Socialism, by Horvat, Branko. 1982. (pp. 197–198) These corrective policies limit the market's incentive system by providing things such as , unemployment insurance, taxing profits and reducing the reserve army of labor, resulting in reduced incentives for capitalists to invest in more production. In essence, social welfare policies cripple capitalism's incentive system and are thus unsustainable in the long-run. Market Socialism: The Debate Among Socialists, 1998. pp. 60–61"
Marxists argue that the establishment of a socialist mode of production is the only way to overcome these deficiencies. Socialists and specifically Marxian socialists, argue that the inherent conflict of interests between the working class and capital prevent optimal use of available human resources and leads to contradictory interest groups (labor and business) striving to influence the state to intervene in the economy at the expense of overall economic efficiency.
Early socialists (utopian socialists and Ricardian socialists) criticized capitalism for concentrating power and
"Main" summary: "Socialists complain that capitalism necessarily leads to unfair and exploitative concentrations of wealth and power in the hands of the relative few who emerge victorious from free-market competition—people who then use their wealth and power to reinforce their dominance in society." who do not utilize available technology and resources to their maximum potential in the interests of the public.
In the May 1949 issue of the Monthly Review titled "Why Socialism?", Albert Einstein wrote:Einstein, Albert (May 1949). "Why Socialism?", Monthly Review.
I am convinced there is only one way to eliminate (the) grave evils (of capitalism), namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow-men in place of the glorification of power and success in our present society.
Critics argue that capitalism is in fact not a democracy, but a plutocracy, because in capitalism there is a lack of Politics, Democracy and economic power for the vast majority of the population. They say that this is because in capitalism the means of production are owned Private property by a minority of the population, with the vast majority of the population having no control of the economy. Critics argue that capitalism creates large concentrations of money and property in the hands of the elite, leading to vast wealth and income inequalities between the elite and the majority of the population.Bakan, Joel (writer) The Corporation (2003) (Documentary) Evidence for the fact that capitalism is Plutocracy can be seen in policies that benefit capitalists at the expense of workers, such as policies where taxes are raised on workers and reduced for capitalists, and the retirement age being increased despite it being against the will of the people. "Corporate capitalism" and "inverted totalitarianism" are terms used by the aforementioned activists and critics of capitalism to describe a capitalist marketplace—and society—characterized by the dominance of hierarchical, bureaucratic, Big business, which are legally required to pursue profit without concern for social welfare. Corporate capitalism has been criticized for the amount of power and influence corporations and large business interest groups have over government policy, including the policies of regulatory agencies and influencing political campaigns. Many social scientists have criticized for failing to act in the interests of the people; they claim the existence of large corporations seems to circumvent the principles of democracy, which assumes equal power relations between all individuals in a society. As part of the political left, activists against corporate power and influence work towards a decreased income gap and improved economical equity.
The rise of giant multinational corporations has been a topic of concern among the aforementioned scholars, intellectuals and activists, who see the large corporation as leading to deep, structural erosion of such basic human rights and civil rights as equitable wealth and income distribution, equitable democratic political and socio-economic power representation and many other human rights and needs. They have pointed out that in their view large corporations create false needs in consumers and—they contend—have had a long history of interference in and distortion of the policies of sovereignty nation states through high-priced legal lobbying and other Jack Abramoff, powerful forms of influence peddling. In their view, evidence supporting this belief includes invasive advertising (such as billboards, television ads, adware, spam, telemarketing, child-targeted advertising and guerrilla marketing), massive open or secret corporate political campaign Campaign finance in so-called "democratic" elections, corporatocracy, the revolving door between government and corporations, regulatory capture, "too big to fail" (also known as "Griftopia"), massive taxpayer-provided corporate , socialism/communism for the very rich and brutal, vicious, Social Darwinism for everyone else, and—they claim—seemingly endless global news stories about corporate corruption (Martha Stewart and Enron, among other examples). Anti-corporate-activists express the view that large corporations answer only to large shareholders, giving human rights issues, social justice issues, environmental issues and other issues of high significance to the bottom 99% of the global human population virtually no consideration. American political philosopher Jodi Dean says that contemporary economic and financial calamities have dispelled the notion that capitalism is a viable economic system, adding that "the fantasy that democracy exerts a force for economic justice has dissolved as the US government funnels trillions of dollars to banks and European central banks rig national governments and cut social programs to keep themselves afloat."
According to Quinn Slobodian, one way capitalism undermines democracy is by "punching holes in the territory of the nation state" to create special economic zones, of which there are 5,400 around the globe, ranging from tax havens to "sites for low-wage production . . . often ringed by barbed wire," that he describes as "zones of exception with different laws and often no democratic oversight."
David Schweickart wrote: "Ordinary people in are deemed competent enough to select their political leaders-but not their bosses. Contemporary capitalism celebrates democracy, yet denies us our democratic rights at precisely the point where they might be utilized most immediately and concretely: at the place where we spend most of the active and alert hours of our adult lives".
Thomas Jefferson, one of the founders of the United States, said "I hope we shall crush ... in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country". In a 29 April 1938 message to the U. S. Congress, Franklin D. Roosevelt warned that the growth of private power could lead to fascism, arguing that "the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.Franklin D. Roosevelt, "Recommendations to the Congress to Curb Monopolies and the Concentration of Economic Power", April 29, 1938, in The Public Papers and Addresses of Franklin D. Roosevelt, ed. Samuel I. Rosenman, vol. 7, (New York, MacMillan: 1941), pp. 305–315.Franklin D. Roosevelt, "Appendix A: Message from the President of the United States Transmitting Recommendations Relative to the Strengthening and Enforcement of Antitrust Laws", The American Economic Review, Vol. 32, No. 2, Part 2, Supplement, Papers Relating to the Temporary National Economic Committee (Jun., 1942), pp. 119–128. Statistics of the Bureau of Internal Revenue reveal the following figures for 1935: "Ownership of corporate assets: Of all corporations reporting from every part of the Nation, one-tenth of 1 percent of them owned 52 percent of the assets of all of them".
U. S. President Dwight D. Eisenhower criticized the notion of the confluence of corporate power and de facto fascismIra Chernus, "Eisenhower's Ideology in World War II", Armed Forces & Society (1997) 23(4): 595–613 and in his 1961 Farewell Address to the Nation brought attention to the "conjunction of an immense military establishment and a large arms industry" in the United States and stressed "the need to maintain balance in and among national programs—balance between the private and the public economy, balance between cost and hoped for advantage".
In a 1986 debate on Socialism vs Capitalism with John Judis vs Harry Binswanger and John Ridpath, intellectual Christopher Hitchens said:
In Das Kapital, Marx identified the commodity as the basic unit of capitalist organization. Marx described a "common denominator" between commodities, in particular that commodities are the product of labor and are related to each other by an exchange value (i.e. price). By using the labor theory of value, Marxism see a connection between labor and exchange value, in that commodities are exchanged depending on the socially necessary labor time needed to produce them. However, due to the productive forces of industrial organization, laborers are seen as creating more exchange value during the course of the working day than the cost of their survival (food, shelter, clothing and so on). Marxists argue that capitalists are thus able to pay for this cost of survival while expropriating the excess labor (i.e. surplus value).
Marxists further argue that due to economic inequality, the purchase of labor cannot occur under "free" conditions. Since capitalists control the means of production (e.g. factories, businesses, machinery and so on) and workers control only their labor, the worker is naturally coerced into allowing their labor to be exploited. Critics argue that exploitation occurs even if the exploited consents, since the definition of exploitation is independent of consent. In essence, workers must allow their labor to be exploited or face starvation. Since some degree of unemployment is typical in modern economies, Marxists argue that wages are naturally driven down in free market systems. Hence, even if a worker contests their wages, capitalists are able to find someone from the reserve army of labor who is more desperate.
The act (or threat) of Strike action has historically been an organized action to withhold labor from capitalists, without fear of individual retaliation. Some critics of capitalism, while acknowledging the necessity of , believe that trade unions simply reform an already exploitative system, leaving the system of exploitation intact. Lysander Spooner argued that "almost all fortunes are made out of the capital and labour of other men than those who realize them. Indeed, large fortunes could rarely be made at all by one individual, except by his sponging capital and labour from others".Martin, James J. Men Against the State, p. 173
Some labor historians and scholars have argued that unfree labor—by Slavery, indentured servants, prisoners, or other coerced persons—is compatible with capitalist relations. Tom Brass argued that unfree labor is acceptable to capital.Cass, Towards a Comparative Political Economy of Unfree Labor (1999) Historian Greg Grandin argues that capitalism has its origins in slavery, saying that "when historians talk about the Atlantic market revolution, they are talking about capitalism. And when they are talking about capitalism, they are talking about slavery." Some scholars, including Edward E. Baptist, Sven Beckert and Matthew Desmond, assert that slavery was an integral component in the violent development of American and global capitalism.Edward E. Baptist. The Half Has Never Been Told: Slavery And The Making Of American Capitalism, Basic Books, 2014. . The Slovenian continental philosopher Slavoj Žižek posits that the new era of global capitalism has ushered in new forms of contemporary slavery, including migrant workers deprived of basic civil rights on the Arabian Peninsula, the total control of workers in Asian sweatshops and the use of forced labor in the exploitation of natural resources in Central Africa.
Academics such as the developmental psychologist Howard Gardner have proposed the adoption of upper limits in individual wealth as "a solution that would make the world a better place". Marxian economist Richard D. Wolff postulates that capitalist economies prioritize profits and capital accumulation over the social needs of communities, and that capitalist enterprises rarely include the workers in the basic decisions of the enterprise.Frances Goldin, Debby Smith, Michael Smith (2014). Imagine: Living in a Socialist USA, Harper Perennial. pp. 49–50.
Political economist Clara E. Mattei of the New School for Social Research demonstrates that the imposition of fiscal, monetary and industrial austerity policies meant to discipline labor by reinforcing hierarchal wage relations and therefore protect the capitalist system through wage repression and the weakening of collective bargaining power by workers can increase their exploitation while boosting the profits of the ownership class, which she says is one of the primary drivers of the "global inequality trend". As an example, Mattei shows that over the last four decades in the United States the profit share of national output increased while labor's share plummeted, demonstrating a symmetrical relationship between owner profit and worker loss, where the former was taking from the latter. She adds that “an increase in exploitation was also evident, with real wages grossly lagging behind labor productivity.”
According to economic anthropologist Jason Hickel, capitalism requires the accumulation of excess wealth in the hands of economic elites for the purpose of large scale investment, continuous growth and expansion, and enormous amounts of cheap labor. As such, there was never and could never have been a gradual or peaceful transition to capitalism, and that "organized violence, mass impoverishment, and the destruction of self-sufficient subsistence economies" ushered in the capitalist era. Its emergence was fueled by immiseration and extreme violence that accompanied enclosure and colonization, with colonized peoples becoming enslaved workers producing products that were then processed by European peasants, dispossessed by enclosure, who filled the factories in desperation as exploited cheap labor. Hickel adds that there was fierce resistance to these developments, as that the period 1500 to the 1800s, "right into the Industrial Revolution, was among the bloodiest, most tumultuous times in world history."
Sociologist David Nibert argues that while capitalism "turned out to be every bit as violent and oppressive as the social systems dominated by the old aristocrats", it also included "an additional and pernicious peril—the necessity for continuous growth and expansion". As an example of this, Nibert points to the mass killing of millions of buffalo on the Great Plains and the subjugation and expulsion of the indigenous population by the U.S. military in the 19th century for the purpose of expanding ranching operations, and rearing livestock for the purpose of profit.
Capitalism and capitalist governments have also been criticized by socialists as oligarchic in nature, due to the inevitable inequality.
The military–industrial complex, mentioned in Dwight D. Eisenhower's presidential farewell address, appears to play a significant role in the American capitalist system. It may be one of the driving forces of American militarism and intervention abroad. The United States has used military force and has encouraged and facilitated state terrorism and mass violence to entrench Neoliberalism capitalism in the Global South, protect the interests of U.S. economic elites, and to crush any possible resistance to this entrenchment, especially during the Cold War, with significant cases being Brazil, Chile and Indonesia.Naomi Klein (2008). , Picador. p. 105
Planned obsolescence has been criticized as a wasteful practice under capitalism. By designing products to wear out faster than need be, new consumption is generated. This would benefit corporations by increasing sales while at the same time generating excessive waste. A well-known example is the charge that Apple designed its iPod to fail after 18 months. Critics view planned obsolescence as wasteful and an inefficient use of resources. Other authors such as Naomi Klein have criticized brand-based marketing for putting more emphasis on the company's name-brand than on manufacturing products.
Some economists, most notably Marxian economists, argue that the system of perpetual capital accumulation leads to irrational outcomes and a mis-allocation of resources as industries and jobs are created for the sake of making money as opposed to satisfying actual demands and needs.
In the early 20th century, Vladimir Lenin argued that state use of military power to defend capitalist interests abroad was an inevitable corollary of monopoly capitalism.
In 2019, Marxian Economist Richard D. Wolff argued that Capitalism is unstable, Capitalism is unequal, and fundamentally Undemocratic.
In a 1965 letter to Carlos Quijano, editor of Marcha, a weekly newspaper published in Montevideo, Uruguay, Che Guevara wrote:
The laws of capitalism, which are blind and are invisible to ordinary people, act upon the individual without he or she being aware of it. One sees only the vastness of a seemingly infinite horizon ahead. That is how it is painted by capitalist propagandists who purport to draw a lesson from the example of Rockefeller—whether or not it is true—about the possibilities of individual success. The amount of poverty and suffering required for a Rockefeller to emerge, and the amount of depravity entailed in the accumulation of a fortune of such magnitude, are left out of the picture, and it is not always possible for the popular forces to expose this clearly. ... It is a contest among wolves. One can win only at the cost of the failure of others.GUevara, Che (12 March 1965). "From Algiers, for Marcha: The Cuban Revolution Today". Retrieved 19 August 2020.
A modern critic of capitalism is Ravi Batra, who focuses on inequality as a source of immiserization but also of system failure. Batra popularised the concept "share of wealth held by richest 1%" as an indicator of inequality and an important determinant of depressions in his best-selling books in the 1980s. The scholars Kristen Ghodsee and Mitchell A. Orenstein suggest that left to its own devices, capitalism will result in a small group of economic elites capturing the majority of wealth and power in society. (2025). 9780197549247, Oxford University Press. ISBN 9780197549247 Dylan Sullivan and Jason Hickel argue that poverty continues to exist in the contemporary global capitalist system in spite of it being highly productive because it is undemocratic and has maintained conditions of extreme inequality where masses of working people, who have no ownership or control over the means of production, have their labor power "appropriated by a ruling class or an external imperial power," and are cut off from common land and resources. They further contend that capitalism needs significant levels of inequality as capital accumulation requires access to cheap labor, and lots of it, as without it the system would be crippled.
In the United States, the shares of earnings and wealth of the households in the top 1 percent of the corresponding distributions are 21 percent (in 2006) and 37 percent (in 2009), respectively. Critics, such as Ravi Batra, argue that the capitalist system has inherent biases favoring those who already possess greater resources. The inequality may be propagated through inheritance and economic policy. Rich people are in a position to give their children a better education and inherited wealth and that this can create or increase large differences in wealth between people who do not differ in ability or effort. One study shows that in the United States 43.35% of the people in the Forbes magazine "400 richest individuals" list were already rich enough at birth to qualify.[13] Another study indicated that in the United States wealth, race and schooling are important to the inheritance of economic status, but that IQ is not a major contributor and the genetic transmission of IQ is even less important. Batra has argued that the tax and benefit legislation in the United States since the Reagan presidency has contributed greatly to the inequalities and economic problems and should be repealed.
Some scholars blame the 2008 financial crisis on the neoliberal capitalist model. Following the banking crisis of 2007, economist and former Chair of the Federal Reserve, Alan Greenspan told the United States Congress on 23 October 2008 that "this modern risk-management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year", and that "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in firms ... I was shocked".
Mutualists and some anarchists support markets and private property, but not in their present form. They argue that particular aspects of modern capitalism violate the ability of individuals to trade in the absence of coercion. Mutualists support markets and private property in the product of labor, but only when these markets guarantee that workers will realize for themselves the value of their labor.
In recent times, most economies have extended private property rights to include such things as patents and copyrights. Critics see these so-called intellectual property laws as coercive against those with few prior resources. They argue that such regulations discourage the sharing of ideas and encourage nonproductive rent seeking behavior, both of which enact a deadweight loss on the economy, erecting a prohibitive barrier to entry into the market. Not all pro-capitalists support the concept of copyrights, but those who do argue that compensation to the creator is necessary as an incentive.
Some scholars argue that the capitalist approach to environmental economics does not take into consideration the preservation of natural resources and that capitalism creates three ecological problems: growth, technology, and consumption. The growth problem results from the nature of capitalism, as it focuses around the pursuit of limitless economic growth and the accumulation of capital. The innovation of new technologies has an impact on the environmental future as they serve as a capitalist tool in which environmental technologies can result in the expansion of the system. Consumption is focused around the capital accumulation of commodities and neglects the use-value of production. Professor Radhika Desai, director of the Geopolitical Economy Research Group at the University of Manitoba, contends that ecological crises such as climate change, pollution and biodiversity loss occur when "capitalist firms compete to appropriate and plunder the free resources of nature and when this very appropriation and plunder forces working people to overexploit their ever-shrinking share of these resources."
One of the main modern criticism to the sustainability of capitalism is related to the so-called commodity chains, or production/consumption chains. These terms refer to the network of transfers of materials and commodities that is currently part of the functioning of the global capitalist system. Examples include high tech commodities produced in countries with low average wages by multinational firms and then being sold in distant high income countries; materials and resources being extracted in some countries, turned into finished products in some others and sold as commodities in further ones; and countries exchanging with each other the same kind of commodities for the sake of consumers' choice (e.g. Europe both exporting and importing cars to and from the United States). According to critics, such processes, all of which produce pollution and waste of resources, are an integral part of the functioning of capitalism (i.e. its "metabolism").
Critics note that the statistical methods used in calculating ecological footprint have been criticized and some find the whole concept of counting how much land is used to be flawed, arguing that there is nothing intrinsically negative about using more land to improve living standards (rejection of the Intrinsicism value of nature).
Under what anti-capitalists such as Murray Bookchin call the "grow or die" imperative of capitalism, they say there is little reason to expect hazardous consumption and production practices to change in a timely manner. They also claim that markets and states invariably drag their feet on substantive environmental reform and are notoriously slow to adopt viable sustainable technologies.[16] Immanuel Wallerstein, referring to the externalization of costs as the "dirty secret" of capitalism, claims that there are built-in limits to ecological reform and that the costs of doing business in the world capitalist economy are ratcheting upward because of deruralization and democratization.[17]
A team of Finnish scientists hired by the UN Secretary-General to aid the 2019 Global Sustainable Development Report assert that capitalism as we know it is moribund, primarily because it focuses on short term profits and fails to look after the long term needs of people and the environment which is being subjected to unsustainable exploitation. Their report goes on to link many seemingly disparate contemporary crises to this system, including environmental factors such as global warming and accelerated species extinctions and also societal factors such as rising economic inequality, unemployment, sluggish economic growth, rising debt levels, and impuissant governments unable to deal with these problems. The scientists say a new economic model, one which focuses on sustainability and efficiency and not profit and growth, will be needed as decades of robust economic growth driven by abundant resources and cheap energy is rapidly coming to a close. Another group of scientists contributing to the 2020 "Scientists warning on affluence" argue that a shift away from paradigms fixating on economic growth and the "profit-driven mechanism of prevailing economic systems" will be necessary to mitigate human impacts on the environment, and suggest a range of ideas from the reformist to the radical, with the latter consisting of degrowth, eco-socialism and eco-anarchism.
Some scientists contend that the rise of capitalism, which itself developed out of European imperialism and colonialism of the 15th and 16th centuries, marks the emergence of the Anthropocene epoch, in which human beings started to have significant and mostly negative impacts on the earth system. Others have warned that contemporary global capitalism "requires fundamental changes" to mitigate the worst environmental impacts, including the "abolition of perpetual economic growth, properly pricing Externality, a rapid exit from fossil-fuel use, strict regulation of markets and property acquisition, reining in corporate lobbying, and the empowerment of women". Jason Hickel writes that capitalism creates pressures for population growth: "more people means more labour, cheaper labour, and more consumers." He argues that continued population growth makes the challenge of sustainability even more difficult, but adds that even if the population leveled off, capitalism will simply get already existing consumers to increase their consumption, as consumption rates have always outpaced population growth rates.
In 2024 a group of experts including Michael E. Mann and Naomi Oreskes published "An urgent call to end the age of destruction and forge a just and sustainable future". They made an extensive review of existing scientific literature about the issue. They put the blame for the ecological crisis on "imperialism, extractive capitalism, and a surging population" and proposed a paradigm shift that replaces it with a socio-economic model prioritizing sustainability, resilience, justice, kinship with nature, communal well-being. They described many ways in which the transition can be achieved.
Recently, a compelling criticism of unmoderated capitalism has emerged: it prioritizes capital over human well-being, except where human well-being contributes to capital production. Critics argue that such a system tends to reward sociopathic behavior. Consequently, they contend that pure (unmoderated) capitalism is inherently unsuitable as a foundation for society. As pure capitalistic models develop, they foster an increase in sociopathic behavior, which ultimately degrades societal functioning, defined by the well-being of most of its members. The detrimental processes associated with excessive sociopathic behavior include the spread of disinformation, the implementation of policies that create severe economic inequalities, and the manipulation of legal and judicial systems to benefit capital flow without regard for the majority's welfare. In response to this criticism, some advocate for moderated capitalism, which promotes policies that value human well-being. This approach creates reward structures that are not solely tied to capital. However, one counterargument is that in a global society with diverse economic models, pure capitalism might prevail over moderated capitalism in the long run because it generates more economic power. (2025). 9781846140396, Allen Lane. ISBN 9781846140396
With the advent of the Industrial Revolution, thinkers such as Pierre-Joseph Proudhon and Karl Marx elaborated the comparison between wage labor and slavery in the context of a critique of societal property not intended for active personal use while emphasized the dehumanisation brought about by machines. Before the American Civil War, Southern defenders of African American slavery invoked the concept of wage slavery to favorably compare the condition of their slaves to workers in the North. The United States abolished slavery during the Civil War, but labor union activists found the metaphor useful. According to Lawrence Glickman, in the Gilded Age "references abounded in the labor press, and it is hard to find a speech by a labour leader without the phrase".
According to Noam Chomsky, analysis of the psychological implications of wage slavery goes back to the Enlightenment era. In his 1791 book On the Limits of State Action, liberalism thinker Wilhelm von Humboldt explained how "whatever does not spring from a man's free choice, or is only the result of instruction and guidance, does not enter into his very nature; he does not perform it with truly human energies, but merely with mechanical exactness" and so when the laborer works under external control, "we may admire what he does, but we despise what he is". Both the Milgram and Stanford experiments have been found useful in the psychological study of wage-based workplace relations.
Additionally, as per anthropologist David Graeber, the earliest wage labor contracts known about were in fact contracts for the rental of chattel slaves (usually the owner would receive a share of the money and the slave another, with which to maintain his or her living expenses). According to Graeber, such arrangements were quite common in New World slavery as well, whether in the United States or Brazil. C. L. R. James argued in The Black Jacobins that most of the techniques of human organisation employed on factory workers during the Industrial Revolution were first developed on slave plantations..
Some Anti-capitalism thinkers claim that the elite maintain wage slavery and a divided working class through their influence over the media and entertainment industry, educational institutions, unjust laws, nationalist and corporate propaganda, pressures and incentives to internalize values serviceable to the power structure, state violence, fear of unemployment and a historical legacy of exploitation and profit accumulation/transfer under prior systems, which shaped the development of economic theory.
Adam Smith noted that employers often conspire together to keep wages low:
To Marxist and anarchist thinkers like Mikhail Bakunin and Peter Kropotkin, wage slavery was a class condition in place due to the existence of private property and the Sovereign state. This class situation rested primarily on:
For Marxists, labor as commodity, which is how they regard wage labor,: "Labour-power, a commodity sold by the worker himself." provides a fundamental point of attack against capitalism.Another one, of course, being the capitalists' theft from workers via surplus-value. "It can be persuasively argued", noted one concerned philosopher, "that the conception of the worker's labour as a commodity confirms Marx's stigmatization of the wage system of private capitalism as 'wage-slavery;' that is, as an instrument of the capitalist's for reducing the worker's condition to that of a slave, if not below it".. This Marxist objection is what motivated Nelson's essay, which argues that labor is not, in fact, a commodity. That this objection is fundamental follows immediately from Marx's conclusion that wage labor is the very foundation of capitalism: "Without a class dependent on wages, the moment individuals confront each other as free persons, there can be no production of surplus value; without the production of surplus-value there can be no capitalist production, and hence no capital and no capitalist!".. Emphasis in the original.See also p. 716: "The capitalist produces and the worker as a wage-labourer. This incessant reproduction, this perpetuation of the worker, is the absolutely necessary condition for capitalist production."
What a cleaned-up version of Sraffa (1926) establishes is how nearly empty are all of Marshall's partial equilibrium boxes. To a logical purist of Wittgenstein and Sraffa class, the Marshallian partial equilibrium box of constant cost is even more empty than the box of increasing cost.Paul A. Samuelson, "Reply" in Critical Essays on Piero Sraffa's Legacy in Economics (edited by H.D. Kurz), Cambridge University Press, 2000
Aggregate excess demand in a market is the difference between the quantity demanded and the quantity supplied as a function of price. In the model with an upward-sloping supply curve and downward-sloping demand curve, the aggregate excess demand function only intersects the axis at one point, namely at the point where the supply and demand curves intersect. The Sonnenschein–Mantel–Debreu theorem shows that the standard model cannot be rigorously derived in general from general equilibrium theory.
The model of prices being determined by supply and demand assumes perfect competition. However, "economists have no adequate model of how individuals and firms adjust prices in a competitive model. If all participants are price-takers by definition, then the actor who adjusts prices to eliminate excess demand is not specified". Goodwin, Nelson, Ackerman and Weisskopf write:
If we mistakenly confuse precision with accuracy, then we might be misled into thinking that an explanation expressed in precise mathematical or graphical terms is somehow more rigorous or useful than one that takes into account particulars of history, institutions or business strategy. This is not the case. Therefore, it is important not to put too much confidence in the apparent precision of supply and demand graphs. Supply and demand analysis is a useful precisely formulated conceptual tool that clever people have devised to help us gain an abstract understanding of a complex world. It does not—nor should it be expected to—give us in addition an accurate and complete description of any particular real world market.Goodwin, N, Nelson, J; Ackerman, F; & Weisskopf, T: Microeconomics in Context 2d Sharpe 2009
New information technologies continuously create conflict between privacy, the control over personal information disclosure, and surveillance. In a current capitalistic society, power is harnessed through a combination of both control and freedom. This fusion of control and freedom, seen through changes in sexuality and race, is a response to the growing privatization of data, networks, public services, and physical spaces, and also to the simultaneous entry of publicity and paranoia into people's lives.
Many theorists supportive of capitalism believed that a free market is a remedy for racism in a functioning society, because if some business owners engaged in discriminatory wage practices targeting minority ethnic groups, other entrepreneurs would take advantage of the opportunity to hire an equally-capable worker for a lower cost, increasing the profitability of the latter. According to Jim Sidanius and Felicia Pratto, despite the fluidity of this theory, reconciling the free market theory with the observed data presents challenges, as those who are in support of free market capitalism also often exhibit a higher likelihood of discriminating against ethnic minorities. Left-wing commentators have argued that capitalism promotes racism alongside culture wars over issues such as immigration and representation of ethnic minorities whilst refusing to address economic inequalities.
Using the Latin American dependency model, the Guyanese Marxist historian Walter Rodney, in his book How Europe Underdeveloped Africa, described in 1972 an Africa that had been consciously exploited by European imperialists, leading directly to the modern underdevelopment of most of the continent.Rodney, W. (1972). "How Europe underdeveloped Africa". Beyond borders: Thinking critically about global issues, 107-125.
The concept of uneven development derived from the political theories of Leon Trotsky. This concept was developed in combination with the related theory of permanent revolution to explain the historical context of Russia. He would later elaborate on this theory to explain the specific, capitalist laws of uneven development in 1930. According to biographer Ian Thatcher, this theory would be later generalised to "the entire history of mankind"."Talk of uneven development becomes dominant in Trotskii's writings from 1927 onwards. From this date, whenever the law is mentioned, the claim consistently made for it is that 'the entire history of mankind is governed by the law of uneven development'." – Ian D. Thatcher, "Uneven and combined development", Revolutionary Russia, Vol. 4 No. 2, 1991, p. 237.
Rand defined capitalism as "a social system based on the recognition of individual rights, including property rights, in which all property is privately owned".Ayn Rand, "What Is Capitalism?” Capitalism: The Unknown Ideal, 19 According to Rand, the role of government in a capitalist state has three broad categories of proper functions: first, the police "to protect men from criminals"; second, the armed services "to protect men from foreign invaders"; and third, the law courts "to settle disputes among men according to objective laws".Ayn Rand, "Nature of Government", Virtue of selfishness.
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