Capitalism and the Weak
Under Capitalism the Weak Gain a Degree of Power Not Possible through Other Economic Systems
MAY 01, 2002 by DANIEL HAGER
Filed Under : Division of Labor, Capitalism, Spontaneous Order, Central Planning
One allegation about capitalism is that it enables the strong to crush the weak. Some critics contend it models the ruthlessness of biological Darwinism’s extermination of the weak through natural selection. In the Marxist view the entire proletarian class is enchained by the power of capitalists and must seize for itself the ownership of the means of production.
In reality capitalism strengthens the weak. Under capitalism the weak gain a degree of power not possible through other economic systems. One definition of capitalism is that it is a network of weaklings who combine their limited strengths to produce the unique personal power that accrues through abundance.
A vivid example of the strength of the weak under capitalism can be seen by considering the green seedless grape. This fruit has become such a staple in American supermarkets that its presence is no longer regarded with amazement. The domestic product is grown primarily in California. It is perishable. Yet it is available even 2,000 and 3,000 miles from there in top condition.
Another marvel added in the past two decades is that green seedless grapes are in supermarkets virtually year round even though California is a limited-source region in winter. Supplies have to come from some place where the weather is warm then, that is, the southern hemisphere. Chile produces most of the grapes marketed in the winter in North America. This highly perishable product reaches the stores after a journey of as much as 6,000 miles. Astonishingly, the volume is so plentiful that even the nonwealthy can consider a purchase.
Typically the American retail price per pound for green seedless grapes during the peak of the Chilean shipping season ranges from about $1.49 to $1.89 but lower during promotions. Based on a volume of 80 to 100 or more grapes per pound, depending on fruit size, the general non-sale price may be pegged roughly at two cents per grape.
The consumer who considers a purchase at that price is the weakest participant in the chain from vineyard to table. Most of us, if confronted with the challenge of securing green seedless grapes in February, would hardly know where to begin. One option would be to fly to Chile, buy grapes from a grower, arrange for shipment, then return home. The cost would be too high even to consider such a tactic. Yet, weak as we are, we have the power in the supermarket to decide either to buy grapes at only two cents each or to reject the retailer’s offer.
Those elsewhere in the network are also weak. The grower may know how to grow grapes but falters at other points. He does not even have the strength to produce his crop without help from others. Mildew has been destroying grapes since at least the Old Testament times of Amos 4:9, and insects and other diseases also need to be controlled. The grower requires pesticides that he is incapable of making himself. Fortunately pesticide manufacturers have created products to save his crop.
Those in the pesticide companies are also weak. None probably could grow grapes well. Many pesticides are synthesized from petrochemicals, but the pesticide formulators would likely not know how to secure the raw product, to explore and drill for it, and then refine it after pumping up a supply. Similarly, the company that does obtain the petroleum is no doubt too weak in skills to convert it into a form that kills fungi and bugs.
The grape grower manifests another weakness after harvest. He lacks the competence to sell his crop to end users. However, an exporter helps him out and starts the process by arranging to ship a load overseas. But once it is at the foreign port, the exporter is probably too weak to move it onward. The North American market for fresh fruit is dynamic and complex, and the load needs the aptitude of somebody who has close contacts with multitudes of buyers and grasps changes in market conditions immediately. So a sales agency or broker takes charge of the load and makes a sale to a chain store, a terminal-market wholesaler, or a foodservice distributor.
But the product still needs to reach the buyer, and that seller, for all his knowledge about markets, is too weak in transportation skills to get it there. He has to engage the services of a truck broker, who secures a truck and driver, and through their efforts the grapes reach the proper destination.
More Weak Links
The entire transportation process exposes the weakness of all who have a role in it. The truck broker and trucker do not have the strength to grow or import or sell the grapes, nor do they know how to build the truck or create the fuel to move it. The ship captain is likewise probably incompetent in the fruit business and is also doubtless unable to buy and own the ship. The ship owner because of his own weakness has to rely on others to build it. The builder of the ship is not strong enough to mine ore and smelt it into the steel that is fabricated into the ship.
Since grapes must be held at about 32 degrees Fahrenheit to prevent deterioration, constant refrigeration is required for the full journey from harvest to retail. Those directly involved in moving the load by sea or over land are likely unqualified to design, install, and maintain cooling equipment. Another essential is temperature recorders to track cooling failures if they occur. The manufacturer of these recorders knows how to build them but not how to create the plastic, metal, and silicate out of which they are assembled.
Making green grapes available to American consumers is a capital-intensive process from start to finish. Those who engage in it are too weak to command capital except in very restricted modes. If the retailer sought capital to build a fleet of ships, he would be rejected. If the truck broker requested capital to buy refrigerated seagoing containers, he would be turned down.
Each participant in the network is shackled by weakness. All each can do in response is concentrate on what he believes he is good at and what he can persuade capital providers is his skill. He is driven by a desire for personal profit. He tries to figure out how he can fit into the system to achieve it.
The success of capitalism derives from its grassroots nature. No central coordination exists. The system develops spontaneously from the ground up rather than by command from the top down. The participants engage in it voluntarily in pursuit of improving their own lives.
This is capitalism’s strength—that there is nobody who is strong enough to be in charge.
Contrast other systems. Suppose a group, impelled by a sense of compassion, desired to provide the masses with a regular supply of seedless green grapes at a price of only two cents each. Out of its benevolent spirit it would offer to cover costs above the two-cent threshold should there be any. A program would be set up to effect the plan. Somebody would be chosen to direct the program.
It would likely founder. The efficiencies imposed by the discipline of the marketplace would be missing. The subsidies required to sustain the program would likely balloon beyond the tenable. “Good works” would be unable to accomplish the good achieved by a spontaneous network of volunteers seeking personal gain.
Marxists insisted they had a system superior to capitalism and got a chance to learn about top-down control by the strong after Bolsheviks seized power in Russia in 1917. A series of failed economic one-year plans from 1924 onward culminated in the grand Piatiletka, the Five-Year Plan of 1928. The central State Planning Commission, explained fisheries expert Vladimir V. Tchernavin, determined “every conceivable detail” of the economy, producing “multitudes of tabulations by which it was possible, for instance, to see where and how much roofing iron, shoes, caviar, horseshoe nails, tractors, wheat, pork, eggs, milk, butter, fish, and so on would be produced and also how they would be used at any given moment of the Five-Year Plan.”1
The system’s intrinsic frailty was that a departure from quota for any one element would destabilize everything else like tumbling dominoes. An extra large catch of fish would, in the absence of market signals and spontaneous market responses, confront an inadequate preset supply of salt, so the surplus fish would rot. “Any deviation [from quotas], whether over-fulfillment or the opposite, in any given industry, would necessarily cause disruption. . . . So it was that, instead of the working out of an orderly plan, chaos prevailed.”2 The strong who managed the system turned into panicked weaklings whose primary occupations became the protection of their own backsides and a search for scapegoats.
Capitalism works the other way around, by making the weak stronger. Louis XIV was in his time the strongest man in Europe, the embodiment of the full power of the French state. But despite that strength he could not command the appearance of out-of-season grapes. Thanks to capitalism, being an ordinary American is better than being the king.
Daniel Hager is a freelance writer in Lansing, Michigan.
- Vladimir V. Tchernavin, I Speak for the Silent (London: Hamish Hamilton, 1935), p. 22.
- Ibid., p. 23.