Published in The Encyclopedia of Critical Psychology, T. Teo (Ed.), Springer, 2013.

Capitalism

Carl Ratner

www.sonic.net/~cr2

Introduction

Capitalism is an essential topic for psychologists to study. The reason is that capitalism is the dominant cultural system in the world -- and has been for the past four centuries -- and culture is the basis of psychology. To ignore capitalism is to overlook important details of culture which are involved in psychological phenomena. Unfortunately, capitalism is virtually never mentioned by psychologists, even those who profess an interest in culture and psychology (Ratner, 2012). This chapter attempts to correct this error.

Definition

The fullest and deepest, and most critical characterization of capitalism (that is relevant to critical psychology) was articulated by Marx (1973). He demonstrated that for all of capitalism’s achievements – which Marx did respect -- capitalism is essentially exploitive. Capitalism produces exploitation while denying it, obfuscating it, rationalizing it, legitimizing it, and mystifying it as freedom, agency, democracy, and fulfillment. Because the exploitive character of capitalism is rarely analyzed, this chapter explores it in economic and psychological terms.

Keywords: political economy, exploitation, cooperation, consumerism, commodification, consumer psychology, world system, liberalism

Capitalist exploitation

Foster & McChesney (2012) document the exploitive nature of capitalism in Chinese sweat shops. Low wages for Chinese workers (4% of American wages) enable Apple computer, for example, to reduce labor costs to only 3.6% of total manufacturing costs of IPhones. This generates a 64% profit margin on manufacturing costs. In some Chinese sweat shops that produce Microsoft products, workers are at the factory 83 hours per week, and work on the production line 68 hours. Workshops are 34 meters by 34 meters square and contain 1,000 workers who are paid 52 cents per hour take home pay. In another Chinese factories, workers work on computer keyboards for 7.2 seconds each, 500 per hour. A worker is given 1.1 seconds to snap each separate key into place repeating the operation 3,250 times every hour, 35,750 times a day! Employees work 12 hour shifts, 7 days a week, with two days off a month.

The Pou Yuen Plant F in Dongguan (owned by a Taiwanese group) produces goods for the German company PUMA. The base wage in 2004 was 31 cents per hour for 14-16 hour shifts. The total cost of labor to make a pair of PUMA sneakers came to just $1.16. The workers’ wages amounted to just 1.66% of the sneakers’ $70 retail price. It takes 3 hours to make a pair of sneakers. PUMA’s gross manufacturing profit on a pair of $70 sneakers is $34.09. PUMA’s hourly profit on manufacturing each pair of sneakers is more than 28 times greater than the wages workers received to make the sneaker. PUMA makes an annual profit of $38,188 per production worker in China. When profit is measured against all corporate expenditures, not simply the manufacturing process in factories, PUMA’s profit is $7.42 per sneaker, which is 6.4 times (640%) more than the workers are paid to make the sneaker. The workers pay for their entire year’s salary in 5 days’ work! All the rest of their yearly production goes to profit.

Unequal class structure does not just happen because some people work harder than others. Class structure is formed because some people exploit others -- that is, they forcibly take wealth from them (Taibbi, 2011). One clear example is the way in which capitalists expropriate productivity gains from the workers who produced them.

From 1972-2009 “usable” productivity -- that part of productivity growth that is available for raising wages and living standards -- increased by 55.5%, while real hourly pay fell by almost 10%. This opened a gap of 44.4% between compensation and usable productivity since 1972. Had compensation matched usable productivity growth -- i.e., if workers had been paid the value of their annual productivity increases (as they essentially were prior to the early 1970s), the 84 million non-supervisory and production workers in 2009 would have received roughly $1.91 trillion more in wages and benefits. They would have received $35.98 per hour in 2009 instead of the $23.14 they actually received. In other words, 13.5% of GDP in 2009 was transferred from workers to capitalists and managers. (Cypher, 2011).

Capitalists additionally exploited workers by needlessly firing them during the economic retrenchment and replacing them with technology and higher productivity of the remaining employees. In the Great recession, between late 2007 and the end of 2009 output fell 4.5% but the numbers of workers fell by 8.3%. Companies displaced more workers than they needed to, in contrast to the 70s when they displaced fewer than they needed to. (During the recession of the 1970s the output of goods and services in the U.S. fell by 5% and employment fell by 2.5%. Companies retained workers whom they didn’t need just to protect their jobs.) Companies today are more ruthless with regard to jobs and workers than before (Wall Street Journal, July 27, 2011, p. B1).

This objective exploitation leads to subjective unhappiness of workers: “More than 3/4 of departing employees say they wouldn’t recommend their employer to others the worst percentage in at least five years...In 2008, just as the recession began, only 42% of employees said they wouldn’t recommend their employer” (Wall Street Journal, Aug. 8, 2011, p. B8). Antipathy towards employers doubled in three years (see Hommerich, 2012 for data on Japan linking rising subjective feelings of vulnerability to objective measures of social inequality and insecurity).

Capitalist exploitation is a pincer movement where capitalists increase profit through reducing wages, and they reap high interest payments on loans that people are forced to obtain because capitalists have reduced their wages and benefits, and have curtained public spending through neoliberal policies (Soederberg, 2013). “The Class of 2011 will graduate this spring from America’s colleges and universities with a dubious distinction: the most indebted ever. $22,900: Average student debt of newly minted college graduates. That’s 8% more than last year and, in inflation-adjusted terms, 47% more than a decade ago. The Collegiate Employment Research Institute estimates that the average salary for holders of new bachelor degrees will be $36,866 this year, down 25% from $46,500 in 2009” (Whitehouse, 2011).

Inequality. Not only is inequality increasing in the U.S. between the capitalist class and the working class, it is also increasing within the capitalist class. It is increasingly concentrated in the very elite of that class. In 2007, the five best-paid hedge fund managers earned more than all of the CEOs of the Fortune 500 corporations combined. The income of just the top three hedge-fund managers (James Simon, John Paulson, and George Soros) was a combined $9 billion!

Exploitation and stagnation: A double helix of capitalism

Marx explained that capitalist exploitation is not only unjust and immoral, it is economically unsustainable as well. Morality thus has a political-economic dimension. Capitalist exploitation deprives workers of the financial means to consume what they produce; this results in overproduction of goods, and stagnation in production and profitability. Stagnation forces capitalists to desperate, speculative, unsustainable measures to generate profit. These measures lead to further exploitation and economic crisis, as in the Great Recession of 2008 (the magazine Monthly Review develops this point exceptionally well). This is an intractable problem (an intractable dynamic or “law”) of capitalism that dooms the system to collapse at some point – just as other grand social systems have collapsed.

American capitalism has been in a sustained decline since the 1970s (Ratner, 2012, pp. 294-302). One indicator is that the recovery from the current recession is weaker than the recoveries from recessions ending in 1975, 1982, 1991, and 2001, as measured by consumer credit, disposable personal income, personal consumption, and the unemployment rate. For example, adjusted for inflation, retail sales at the end of 2012 were only 13% higher than when the recession officially ended in 2009; whereas sales increased 18.5% in the aftermath of the previous four recessions (Wall Street Journal, Dec. 13, 2012, p. C1).

A recent study (“Majority of Jobs Added in the Recovery Pay Low Wages, Study Finds,” New York Times, Aug. 31, 2012, p. B1) documents the dramatic deterioration in the American capitalist political economy. While a majority of jobs lost during the downturn were in the middle range of wages, a majority (58%) of those added during the recovery have been low paying, according to a new report (http://www.nelp.org/index.php/content/content_about_us/tracking_the_recovery_after_the_great_recession) from the National Employment Law Project. During the recovery, only low-wage jobs increased more than they lost during the recession. Mid-wage jobs declined by 4 million from 2008-2010, and regained less than 1 million from 2012-2012; high-wage jobs declined by 1.1 million and have recovered 0.8 million; low-wage jobs declined 1.2 million but increased by 2 million from 2010-2012. The occupations with the fastest growth were retail sales (at a median wage of $10.97 an hour) and food preparation workers ($9.04 an hour).

This report has important implications for the debate over educational reform. The report shows that the capitalist political economy is responsible for a general deterioration of high and mid-level occupational skills. This filters down into educational psychology where it reduces students’ educational aspirations. The reduced economic incentive for educational achievement is directly infused into schooling by neoliberal educational reforms that restructure pedagogy along to be congruent with neoliberal political-economic interests. This is described in the chapter in the Encyclopedia on macro cultural psychology. Education will never improve as long as the economy has no use for it, and neoliberals are limiting it. (Another consequence of neoliberal educational reform is to narrow education so that students will not develop critical, analytical, logical, cognitive skills and historical thinking that would enable them to comprehend the full scale and the full reasons for the deteriorating capitalist political economy and the entire society. Comprehending this would lead to massive resentment and rebellion. Neoliberal educational reform is thus really an assertion of social control over potentially revolutionary resistance to the status quo.) Blaming education, bad teachers, and bad pedagogy for the lack of high-skilled workers is a specious distortion of the real reasons.

Privatizing the public

Capitalist businesses dominate public institutions. Corporate corruption of the political process is well-known (Wolin, 2008). Lesser known is the fact that corporations have infiltrated police departments and make them do their bidding.

The New York City Police Dept. has set up a “Paid Detail Unit” of cops that corporations pay for -- rent -- to enforce their own interests. They do so disguised as NYPD, wearing NYPD uniforms and carrying weapons and using the training that are all provided by the taxpayer. The Paid Detail typically reports directly to a member of the internal security for the corporation.  They follow the rules given to them by the corporation.  They work in their NYPD uniforms so the public has no way to know they are not being paid by the NYPD, are not under the jurisdiction of the NYPD, and are essentially private thugs. Yet they use their authority as “off-duty” police to make arrests, as any off-duty cop can -- in the interest of their corporate bosses, not public safety. This form of privatizing public services to combat the public interest in whose name the work is done, is more clandestine than privatizing education where at least people know that teachers are not public employees or public servants, but are private employees of private interests. J.P. Morgan bank and the New York Stock Exchange recently paid $4 million to the New York City police department to quell civil protests against Wall Street and establishment policies. These privatized city cops conducted the mass arrests and beatings of Occupy Wall St. protestors (Martens, 2011).

The national police state. Exploitation and immerisation must be enforced and defended against resistance by the victims. (This, of course, is reframed as “security,” or protection.) Consequently, the State has become a police state that spies on, detains, brutalizes, prevents, and prosecutes potential resistors. Today, 64% of American federal employees are in the military or work for the departments of Defense, Veterans Affairs, and Homeland Security.

The national police state extends to the international police state. All modern capitalist countries have conquered foreign nations through military and financial means, including funding and training of death squads from Chile to Indonesia. One of the worst of these interventions is the little-known fact that American capitalists actively supported Hitler (Sutton, 2010).

Capitalism is a world system

Capitalism is a coherent, unified, administered domestic system and international system. The capitalist class works in a concerted fashion to impose capitalist practices on every social sector. Today, they are actively at work to extend capitalist hegemony to the fields of education, medicine, pensions, health insurance, election rules, legislative procedures, the military, the judiciary, regulatory agencies, the media, news, scientific research, athletics, tax codes, and trade. The 10 largest American financial institutions control 60% of domestic financial assets. Globally, the 10 largest financial institutions control 70% of global financial assets (Foster, 2010, p. 9).

Transnational capitalist corporations form corporate-government institutions that subsume national governments within corporate rules. Corporations are thus dominating national governments in a unified world capitalist system (Carroll, 2012). The World Trade Organization (WTO) decreed in June, 2012 that basic consumer information such as country-of-origin labels on meat are “unfair trade barriers” to multinational corporate profits. The WTO has proclaimed that U.S. “dolphin-safe” tuna labels and a U.S. ban on clove-, candy- and cola-flavored cigarettes both violate WTO trade rules. The recent WTO rulings are not merely advisory. The United States will have to abandon some hard-won labeling rules or pay to maintain them in the form of fines or sanctions.

The Obama administration has continued negotiations on a secret Bush administration initiative called the “Trans-Pacific Partnership.” It limits a signatory’s right to regulate land use, food safety, natural resources, energy, healthcare, financial services, and human rights. Special private courts would adjudicate compliance. These courts would consist of three attorneys from corporations acting as judges. These corporate attorneys would decide whether particular governments were in compliance with TPP stipulations (see Marazzi, 2011 for an excellent discussion of capitalism's recent trends).

Critical Debates

In contrast to the description of capitalism as fundamentally a coherent, exploitive system, defenders of capitalism describe it as segmented, efficient, rational, free, productive, innovative, and benefitting community through the accumulation of egotistical choices. Problems associated with capitalism are construed as anomalies, mistakes, or accidents. Conservatives adopt this viewpoint wholesale. Liberals adopt it with minor reservations and adjustments. Liberals recognize excessive greed that plagues unfettered capitalism, but they believe that a few governmental regulations will contain these and allow the advantages of the market to prevail. Liberals never identify exploitation as an essential element of capitalism. They never call for the transformation of the capitalist system or the replacement of capitalist ruling class by a cooperative, democratic political economy.

For example, Nobel Laureate Paul Krugman (2012, p. 12), who describes himself as a “free market liberal” economist, opines that “The truth is the recovery [from the recession that began in 2008 and has persisted through 2012] would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending…With a boost in spending, we could be back to more or less full employment faster than anyone imagines…Now is the time for the government to spend more until the private sector is ready to carry the economy forward again…Measures I have advocated would mainly try to boost the economy rather than try to transform it.”

This economic liberalism insists that the private capitalist economy is basically sound and it just needs some government priming to get it back on track that a few greedy capitalists have derailed. Krugman opposes transforming the political economy, and this includes rejecting a cooperative transformation.

Krugman exemplifies the liberal position as loyal opposition to capitalism. It presses for humanitarian changes within the system. This is utopian. The American economy has been stagnating since the 1970s, 40 years before the current crisis. The private economy has been plunging capitalism into a spiral of permanent decline. GDP growth was 4.5% in the 1960s, 3% in the 70s, 80s, and 90s, and 1.5% from 2000-2011. The rate of growth in this last period was 63% below that of the 1960s. From 2007-2012 the rate of growth was 0.6%, despite the infusion of $14 trillion in government stimulus. Growth declined from 4.5% in 1995 to 0.6% in 2012, despite massive tax cuts for the rich in 2003. Wages now are at 1970s levels; wages for college graduates have declined 15% in the past 10 years. The last several recessions have produced “recoveries” in GDP and profits without any job increases (jobless recoveries). In addition, jobs have become increasingly skewed toward poorly paid, low-skill occupations. Furthermore, the industrial production index has steadily declined from 10% in 1955 to 2% in 2010 (an 80% decline). Manufacturing has been replaced by financialization as the major driver of GDP. Yet financialization does not produce anything and is therefore incapable of carrying the economy forward. Quite the opposite, the rise of financialization to about 70% of the economy has driven it to one crisis after another and to a steadily declining growth in GDP (Foster & McChesney, 2012, pp. 4, 15; Foster, 2010; New York Times, Sept. 16, 2012, p. SR4).

To proclaim that the private economy will easily return to “normal” and carry us “forward” ignores this structural, continuous, intractable decline in the private economy that is due to the fundamental problem of overproduction that is rooted in the way that capitalism generates wealth by exploiting its work force. Krugman’s position is close to Milton Friedman’s apologetics for capitalism as the best, and only, political economy, and in no need of fundamental, structural transformation, i.e., toward cooperatives.

Liberal achievements never challenge the essence of capitalism. Indeed, they are always won by accommodating the capitalist ruling class. A few examples demonstrate this:

Roosevelt was quite adept at bargaining with corporations. In his first 100 days, to attract corporate support for the National Industrial Recovery Act, he won collective bargaining, minimum wages and maximum hours in exchange for a temporary suspension of antitrust law, so businesses could fix prices. To establish the Securities and Exchange Commission in 1934, he made concessions to Wall Street that scrapped statutory requirements in favor of regulatory flexibility. The following year, to allow the Federal Reserve to better conduct monetary policy, he gave bankers representation on the policy committee.

Lyndon Johnson also found little value in warring with corporations. He won a Keynesian tax cut in early 1964, defeating budget-conscious conservatives, thanks to a broad coalition that included corporations. He attracted business support to back his first antipoverty bill by junking plans to promote family farming and push businesses to hire long-term unemployed people. He created the Transportation Department, in 1966, only after exempting resistant shipping interests from its jurisdiction. He incited a new era of environmental protection, increasing federal responsibility for cleaning air and water, while defusing corporate opposition by trading away federal pollution standards.

Recently released e-mail exchanges between the Obama White House and the pharmaceutical lobby, which detail a path of compromises that won the drug industry’s support for the Affordable Care Act, certainly look more like “business as usual” than “change.” The e-mails include a White House promise of a “direct line of communication” to lobbyists, along with a suggestion to “stay quiet” about an agreement that buried a proposal for cheap drug imports. [The Act forces people, and subsidizes them, to buy insurance from private companies. This individual mandate was a conservative idea hatched by the right-wing Heritage Foundation – known as the Heritage Consumer Choice Health Plan --; promoted in the '90s by the likes of Newt Gingrich and Bob Dole; first enacted by Mitt Romney as governor of Massachusetts; and which benefits private insurance companies and the for-profit hospitals by adding tens of millions of additional customers and the pharmaceutical industry by banning Medicare from using its market power to negotiate lower drug prices. The Act was largely written by health insurance industry lobbyists.]

Health care was not an anomaly for Mr. Obama. His original stimulus package never faced well-financed conservative opposition in part because the United States Chamber of Commerce backed the business tax cuts in the package. We got a Consumer Financial Protection Bureau after Mr. Obama put Wall Street at ease by resisting proposals to cap the size of banks. New standards lifting average fuel-efficiency goals were set once the White House accepted the automakers’ demand for a review in 2021 and flexibility regarding light trucks. The food safety bill empowered the Food and Drug Administration to recall tainted items but won industry support by dropping a ban on bisphenol A, or BPA, a chemical used in food and beverage containers (“How Liberals Win,” New York Times, July 1, 2012, p. SR8).

Obama’s liberal endorsement of the capitalist status quo is also demonstrated in the fact that he has continued all of Bush’s counterterrorism policies, as well as neoliberal educational policies (Williams, 2012).

Liberalism thus does not understand the essential problems of capitalism, nor can it solve them.

Practical Relevance: Capitalism and Psychology

Because this chapter appears in an Encyclopedia of Critical Psychology, it is appropriate to discuss the way that capitalism organizes psychological phenomena. This will not only explain concrete psychology, it will also explain how capitalism maintains itself through subjectivity. This reciprocal relation between cultural factors and psychology/subjectivity/consciousness is central to understanding and maintaining each.

Capitalism, marketing and engineering the bourgeois self

Engineering desires, needs, and tastes through marketing is a necessary way to overcome the problem of economic stagnation, described earlier. Because workers cannot afford to purchase their products, they must be induced to buy beyond their means. Extending credit is one aid – American household debt is 113% of after tax income as of June 2012. Creating intense, insatiable, uncontrollable desire is another inducement to consume beyond what wages afford and should limit for the rational consumer. Marketers need to create an entire irrational psychology that dispenses with rational decisions based upon wages. This is what consumerism is all about. Commodifying the self to identify one’s success and happiness with products is a key element of this psychology. Another mechanism for inducing consumption is to promote “junk” products that provide intense, superficial stimulation that quickly vanishes and needs to replenished by new products. Junk food, and the continuous snacking it causes, is an obvious example. Junk products generate more purchases than wholesome products which generate satiety and enduring satisfaction (Ratner, 2012, pp. 335-375).

Zwick explores the ways that consumer capitalism engineers consumer psychology. He explains the erosion of community that consumer capitalism promotes in the area of condo housing:

Certainly, the dream of a community that protects against loneliness, ensures meaningful personal encounters, and holds the promises of authentic and lasting social relations may appeal to many potential condo buyers. Yet, the frailty of each member's social, professional, and personal relationships means that for most “members” community constitutes hardly more than a fragile network of personal contacts. More importantly, given the increasing unpredictability of professional and personal biographies in liquid modernity, the upwardly mobile condo dweller cannot well afford belonging to a community made up of lasting, committed relationships to a group, a person, or a place. Social responsibilities and emotional dependencies are considered a liability for mobility, a drag on personal freedom, and a potential barrier to a life of enterprise. Hence, marketers must be careful not to present an unfashionable, traditional version of community when what their particular clientele is seeking is a deliberately patched-together set of active, consumerist, pleasant, and affluent individuals “just like them”—what Dean calls “enterprise community”—that allows for safe, enjoyable, and cooperative exchanges while guaranteeing a non-committal and always temporary association with others characteristic of neoliberal individualism.

Zwick explains that consumer capitalism insidiously promotes the autonomous self and personal agency in fraudulent ways that actually work in the service of consumerism:

A second biopolitical strategy of condo marketing pursues what we term enterprising consumption. It aims at stirring the desire of the aspiring middle-class condo population to maintain a mode of existence centered on the “endless, self-creative project of making yourself and your life a work of art”. The marketer asks the condo buyer to consider the dwelling together with the large and always-changing universe of consumption opportunities as a resource for the work of continuous self-realization and self-production. Enterprising consumption is, hence, presented as a form of self-government that pushes the buyer of the condo or loft to cultivate him- or herself as “human capital” employed toward the maximization of her own creative potential and investment. However, this pursuit of lifestyling as a practice of continuous self-formation is not to be viewed by the consuming subject as an end in itself. Rather, enterprising consumption is to be undertaken as part of a straightforward economic calculus where the right kind of local consumption is positioned as a key practice in the transformation of the neighborhood and thus of economic value creation; for example, attracting and supporting a more high-end retail environment in turn increases the neighborhood's desirability more generally thus ensuring a rise in value of the real estate investment. Put differently, "by urging the buyer of a condo or loft to consider every act of consumption as a matter of entrepreneurial judgment—as a cost–benefit calculation that can ultimately be tied back to the value of the acquired real estate—condo marketers hand the responsibility of future value creation (through the transformation of the immediate and extended vicinity of the condo development) over to the autonomous choices of each individual owner” (Zwick & Ozalp, 2011, pp, 239-240).

Biopolitical marketing is a strategy of subjectivation by encouraging consumers to cultivate themselves as autonomous and self-interested individuals who regard their performance of a specific consumerist lifestyle, based on a particular set of economic, cultural, and social resources, as a form of investment, which can generate a return. It is a strategy of subjectification in that it seeks to govern a population of consumers, or a community of buyers, as a form of “human capital” whose effects produced at the level of everyday life are pitched against other forms of human capital, thus framing all forms of life in economic value and making every individual—including, as in the case of condo marketing, populations not directly targeted by biopolitical marketing—morally responsible for navigating the social realm using rational choice and cost–benefit calculation to the express exclusion of all other values and interests (ibid., 245-246; Zwick, Bonsu, Darmody, 2008).

Biopolitical marketing wants to govern consumer conduct as a technology of the self, not through force and coercion but through “autonomous” processes by which the self constructs and modifies him- or herself in ways desired by the marketer. Biopolitical marketing relies on a form of power that is primarily about the guidance of consumer behavior, i.e. governing the forms of self-government, structuring and shaping the field of possible action of subjects (p. 247).

The biopolitical turn in marketing is an attempt to erect a specific space of power that produces self-producing and self-governing subjects; and to manage and channel the processes of self-production and self-governance into profitable avenues. As a consequence, biopolitical marketing turns conventional marketing on its head by positing what would be considered a desirable outcome of a purchase such as community, social communication, and lifestyle as an input for a new mode of surplus value production (p. 249).

This research is a powerful critique of agency. For it demonstrates how agency has been made to serve capitalism rather than the reverse. Capitalism encourages an active, agentic, enterprising consumer who creates a lifestyle out of products and is constantly searching for new ways to do this. This active self, of course, generates more sales and profits. This cultural exploitation of agency cannot be admitted by the ideology of individual choice, rationality, and democracy. So biopolitical marketing denies its actions and pretends that it is simply responding to autonomous, creative, self-expressive, authentic, agentive individuals.

It is alarming that many cultural psychologists are fooled by this rational consumer rhetoric: they claim that individuals are autonomous, creative, agentive beings who use culture for their own purposes (Ratner, 2012, chap. 6).

Dunn (2008) emphasizes the 'systematic commodification of need and want.' We don’t simply want commodities to use; more insidiously, our psychology has become commodified, it has been infused with the commodity form of capitalism. Psychological phenomena are defined in terms of commodities that are bought and sold. Commodities make us feel happy or sad, successful or unsuccessful, they determine what we need and want. Commodities are presented in ways that tell us that we need and desire them. They are not presented neutrally for us to consider. They are laden, or saturated, with desire; they call for us to use them; this is why we “must” have them. The self does not stand apart from commodities, independently deciding which of them it wants to serve its own needs. Commodities are the tail that wags the dog. We derive our status from the objects we possess; objects define us more than we define them. This is why we “must” have them. Objects are not bestowed upon us to reflect or express our capacities. Rather, objects define us: we are popular because of our objects. We buy our popularity through them.

The proliferation of commodities generates proliferating needs, wants, and emotions; it also generates a high intensity level of need and an insatiable level of need -- even for such traditionally commonplace objects like sneakers, trash cans, and telephones. Commodities determine our level and duration of satisfaction (temporary), impatience and anticipation (of new products), the intensity of our need and happiness, and our attention span. Commodification of need and want refers to the fact that features of the commodity market organize the manner in which we need and want, not merely the object of our want (Ratner, 2012, pp. 335-375).

Within “the cultural logic of late capitalism,” David Howes (2005) has suggested hyperesthesia or “the sensual logic of late capitalism” to designate how commoditized senses and sensual codes pervade the mechanisms of consumption, such as media, entertainment, advertising, retail architecture, and fashion. Howes correctly highlights the role of the senses as a driving force within the contemporary capitalist economy of consumption. As a term and concept, hyperesthesia also implies a neuro- logical condition precipitated by the logics and architectures of consumption. As a medical condition, hyperesthesia involves an abnormal increase in sensitivity to stimuli of the senses.

Hochschild (2012) documents the commodification of psychological phenomena. She reveals ways in which online dating commodifies the manner in which people portray themselves and respond to each other. Looking for love is treated as looking for a job. Internet self-presentations are short and must attract a viewer’s attention in 3 seconds. Individuals brand themselves, and seek a return on their investment in the quantitative form of responses. Presenters are often rated with a number. This depersonalizes them. Several subjects who hooked up on dates reported the experience of wanting to find more “6s” to compare. This commodification of people into quantities led to lack of commitment since there is always “another 6 out there.” Ironically, Hochschild reports that online dating was most successful when participants minimized the commoditization features that they had paid to adopt. Failures occurred when participants adopted commoditization too seriously.

Internet dating coaches similarly truncate their psychology by commodifying it. Coaches commonly devise different packages or levels of assistance. They carefully gauge their assistance, attention, and concern to how much the customer pays for. This replaces genuine concern for helping the customer find satisfaction.

Another of Hochschild’s subjects applied business logic to her family behavior. She believed in outsourcing whatever can be done better and cheaper, and she applied this to herself: “I don’t invest my identity in the stuff I hand off. ‘m not a fantastic cook so it’s no problem to order in or eat out.” The problem is that she winds up outsourcing all kinds of personal interactions with her family. Instead of outsourcing increasing quality time, it becomes an inexorable pressure to hire more experts and coaches for all sorts of things. One executive paid an assistant to send flowers to his mother. When she asked him the names of the flowers she had received, he did not know what “he” had sent his mother.

The market has so commodified our tastes, needs, desires, feelings, and logic that many people feel more comfortable purchasing personal services than interacting on a personal level. They feel that personal relations are too complex, embarrassing, or unreliable. Only a few decades ago, before market dominance, people thought just the opposite.

The Pharmaceutical Self

An interesting example of capitalist psychology is the manner in which the self is shaped by the massive presence of corporate pharmaceuticals -- especially, psychopharmaceuticals. Anthropologists have called this the “Pharmaceutical Self” (Jenkins, 2010). They begin with identifying “psychopharmaceutical culture.” It is critical to identify such concrete factors and systems and to studiously avoid nebulous cultural abstractions such as “collectivism,” “power difference,” and “neuroticism” which never deal with concrete factors, their organization in a social system, and their politics.

This “anthropology of psychopharmaceuticals” studies them as cultural factors -- i.e., as institutions, cultural artifacts, and cultural concepts. The “social life of medicine” includes its existence as a commodity based in capitalist, global corporations, subject to all the principles, dynamics, manufacture, research, and marketing that characterize such corporate products. The cultural-politics of medicine also include ways that they are included in government health policy, which, of course, is heavily influenced by corporate “lobbying.” For instance, drug companies promote neoliberal governmentality that shrinks public services such as mental hospitals so that patients will be sent into society without adequate support and supervision, and will require heavy doses of medication, for which they are held responsible to regularly consume. Drug companies also influence psychiatric research -- including diagnostic measures such as DSM. -- to emphasize biological causes of disorders and medical treatments. (This has the political effect of reducing attention to social critique of socio-cultural causes of psychological problems, which has occurred throughout the social sciences and in the National Institute for Mental Health.) Drug companies press insurance companies to reduce their compensation to physicians, so that doctors are forced to examine more patients per day and rely more on medication than on involved, personal treatment such as psychotherapy. Neoliberal corporate social philosophy also promotes the notion that individuals are responsible for their own behavior and are not entitled to public support, which further throws patients back onto individual medication (see Applbaum, 2009 for a case study of how drug companies organize – “channel” -- insurance companies, physicians, hospitals, governmental regulatory agencies, patient advocacy groups, and patients to pay for, prescribe, endorse, and “need” psychopharmaceuticals for an expanding set of disorders. This process seeks to convert these expert gatekeepers into pliable consumers of manufacturers’ propaganda. The process of channeling many disparate players from distinct organizations holding different interests, represents an important new stage of corporate management power that is horizontal. This testifies to corporate power becoming more insidious, duplicitous, multiplicitous, and tentacular as it extends beyond its own doors to seemingly independent experts and consumers. This new form of corporate hegemony and its psychological effects and requirements is an important subject for cultural psychologists to study).

These cultural-political- economic elements are built into psychopharmaceuticals. Psychopharmaceuticals thus “totalize” a broad culture of interrelated factors. The features of this commodity culture are cultivated into the subjectivities of potential patients to prepare them to accept psychotropic drugs as the solution to their problem. Psychopharmaceuticals constitute a cultural “imaginary” which is the conceivable possibilities for human action. The “pharmaceutical cultural imaginary” structures the agency of citizens concerning the directions it is likely to take when casting about to understand and solve life problems.

“Strategic medicalization” conditions patients to view themselves through the cultural lenses of neoliberal social philosophy, budgets, medical care from physicians, bio-medical causes of psychological disturbance, autonomous, self-responsible individualism, and fragmented communities with no social support.

International Relevance

A thorough understanding of capitalism is vital for the world’s people for whom capitalism is the dominant world system. The more they understand the structure, principles, and dynamics of capitalism the more they will understand the way it organizes their lives. Understanding the capitalist world system is also crucial for setting forth a direction of social reform that specifically counters capitalism’s exploitive features, and utilizes its advancing features. Understanding capitalism as a global system also unifies multitudes of people around the world in a common set of problems that demand a common solution. People thus have an objective common interest in cooperating toward a common alternative to capitalism – as the chapter on emancipation in this Encyclopedia explains. If people realized this in their subjective understanding, they would halt the internecine divisions and conflicts that are decimating their cultures.

Future Directions

Describing capitalism as an exploitive system should lead to a new direction for analyzing (deconsrtructing) social phenomena and solving (reconstructing) social problems. Social phenomena that are habitual, acceptable, enjoyable, and desirable will be viewed more critically to ascertain whether they embody exploitive features of the capitalist system. One of these is the identification of individualism with freedom, agency, and choice. The truth is that in capitalist society, these four terms are insidious constructs for perpetuating the unequal, unjust class structure. The truth is that freedom, agency, and choice are never individual acts; they are always structured by social positions. Ignoring social positions and pretending that choices are free and agentive simply disguises social conditioning and perpetuates it. When poor black males make choices, they cannot be similar to choices that rich white women make. This is why the wealthiest members of the capitalist class promote individual choice – because they know that this ideology preserves their elite position -- it allows them to utilize their resources as the means for implementing choices that poor people can never implement. Really free choices require that anyone who wants to pursue a desire has the social means for implementing them. This requires changing social conditions which individualism obfuscates.

Another reanalysis (deconstruction) that capitalism affords concerns cultural events such as movies, television, music, advertising, and art. They will be analyzed in terms of whether they oppress people (and prepare them to accept oppression as normal) by fostering superficiality, sensationalism, impulsiveness, irrationality, disarray, egoism, violence, transitory involvement, and passive-uncritical acceptance of information, or whether cultural phenomena foster critical thinking, logical reasoning, character development, drawing conclusions from empirical facts, and social responsibility. Today there is little cultural critique that resembles the Frankfurt School, or the work on cultural kitsch in the 1930s-60s.

The analysis of this chapter also leads to explaining social problems – including psychological problems -- as rooted in fundamental, exploitive features of capitalism. They are persistent because they are functional. Capitalists fight to preserve them and they fight against ameliorating them through political or economic changes. Consequently, social problems should not be construed as mistakes, accidents, anomalies, or technical fluctuations that can remedied by technically tweaking the system. People must reject bailing out the system, and must instead bail out from the system to develop a new paradigm based on new principles, practices, and parameters.

The critique and transformation of capitalism must include the subjectivity, consciousness, or psychology that animates it. Oppressive elements of psychological functions must be identified, critiqued, and re-educated. I explain this in the chapters on Psychology of Oppression, False Consciousness, Macro Cultural Psychology, and Emancipation in this Encyclopedia.

People must seek to develop a concrete oppositional system to capitalism. It must negate the exploitive, core elements of capitalism, and replace them with a cooperative, coherent, stable, supportive social system (Hudis, 2012, Ratner, 2013). It will entitle people to own and control their social institutions, resources, and artifacts. This is the most thorough way to overcome the myriad social problems that are caused by alienation and exploitation.

Emphasizing capitalism’s exploitive basis and telos does not mean that capitalism is entirely exploitive or destructive. Future directions for social improvement must analyze capitalism’s fruitful features to be used in a humane society. These include respect for individual desires, opportunities, and views, as well as an emphasis on efficiency and innovation, plus large scale, coordinated enterprises and planning. These cannot be accepted in their current form, which is saddled by the logic of capitalism.

Ethnicity and Multiculturalism

The critical perspective on capitalism emphasizes its exploitive political economy as its central (but not only) element. Exploitation has the strongest explanatory, descriptive, and predictive power concerning behavior. The critical perspective also emphasizes the need to transform the capitalist political economy to a democratic-collective one as the only way to solve capitalism's problems and unify people in a true collective social organization. Movements that do not analyze and transform the exploitive political economy are incapable of understanding and improving human behavior/psychology and social life.

A case in point is the liberal humanistic attempt at respecting diverse peoples and their indigenous cultures/ethnicities. This multiculturalism is deficient despite its good intentions to achieve peace and harmony through respect. One problem is its failure to critically evaluate the diverse cultures/ethnicities it promotes. Multiculturalism/diversity generally takes pride in indigenous, local cultural customs. This blanket respect for virtually all cultures and peoples overlooks their numerous problems. Multiculturalism/diversity additionally fails to engage in critical, political analysis and transformation of capitalism. It presumes that people can be respected just by valuing all cultures/ethnicities and their funds of knowledge/wisdom. If we simply realize how enriching cultures are, we will respect them, and peace and harmony will follow (Thomas calls this "banal multiculturalism," see Ratner, 2011 for discussion and citation).

This strategy operates in blissful disregard of the capitalist juggernaut. It fails to analyze or challenge capitalism, retreating instead into local cultural ethnicities. "The cultural turn" is a detour around capitalism that diverts attention from critiquing and transforming capitalism as it glorifies minority customs. This leaves people subject to the ravages of capitalism, including competition, estrangement, egoism, materialism, climate change, financial speculation, class structure, and aggressiveness that prevent respecting and cooperating with people. Indigenous, ethnic customs do nothing to negate these problems. Multiculturalism does not even significantly improve the social position of minorities. Minorities remain marginalized despite decades of civil rights laws to accept them into the mainstream. Ethnicity can only truly be respected in a democratic, cooperative society that supersedes the capitalist political economy (as I explain in my chapter on Emancipation in this Encyclopedia). This means that the cultural turn should turn toward critiquing capitalist culture and its psychological correlates.

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