Which Creates a Higher Standard of Living: Capitalism or Egalitarianism?
by John Spritzler
January 24, 2014 (and updated more recently)
The URL of this article for sharing it is https://www.pdrboston.org/egalitarianism-outproduces-capitali
[Also see "What Replaces the "Free Market" in a Sharing Economy?"]
[Read here how and why the Spanish Revolution was defeated]
[Read here an eyewitness account of a rural "local assembly" meeting during the Spanish Revolution, illustrating the genuine democracy it entailed]
One often hears capitalism defended on the grounds that it is the economic system that best improves the standard of living of all people. Pro-capitalists cite three facts*: 1) that the proportion of people in the world living in poverty has been declining, especially in China after the decision of the Communist Party of China to embrace capitalism**; 2) that the number of years of life expectancy is rising globally; and 3) that the standard of living and life expectancy of the English population improved during the Industrial Revolution, despite the bad image of that period created by writers such as Charles Dickens.
What the pro-capitalists choose not to mention, however, is that the relevant way to evaluate the merits of capitalism is not by comparing it to the feudalism that preceded it or by seeing whether or not some things are getting better in recent decades, but by comparing capitalism to egalitarianism. Egalitarianism is the alternative to both feudalism and capitalism (and also to Marxism, about which go here regarding the Soviet Union) that people in different parts of the world, at least as early as the English Peasant Rebellion of 1381, have fought to implement; their efforts were defeated by violence from the wealthiest people, whose objections to egalitarianism had nothing to do with whether it was better or worse than capitalism for improving people's standard of living.
In fact, the evidence, to be discussed below, is that egalitarianism is far better than capitalism even if compared only on the basis of economic productivity and standard of living. Equally important, although not the focus of this article, is the fact that everybody*** is seriously harmed by inequality (no matter how big the "pie" is overall) and benefits from equality; on this basis the extreme inequality generated by capitalism, in China**** as well as the United States, only further weakens the case for capitalism when compared to egalitarianism (which is described here).
To compare economic productivity in capitalism to egalitarianism I will compare a) productivity in the parts of Spain where the egalitarian revolution (sometimes called the Spanish Civil War) of 1936-9 saw wholesale reorganization of productivity with voluntary egalitarian collectives (based on the principle of "From each according to ability, to each according to need") inspired by anarchist ideas, to b) productivity in the same place just prior to the revolution when capitalism (even if some of the capitalists still retained their feudal titles, such as "Count") prevailed.
First, here are some brief facts about what happened in Spain where the egalitarian revolution (led by people who called themselves anarchists) took place.
The revolution was not a small utopian community. Sam Dolgoff, in his (online and paperback) The Anarchist Collectives, (pg. 71) gives estimates of the number of people participating in the revolution ranging from 3.2 million ("Frank Mintz estimates 1,254 to 1,865 collectives, 'embracing 610,000 to 800,000 workers. With their families, they involve a population of 3,200,000...") to 7 to 8 million ("Over half the land in the Republican zone was collectivized. [Souchy] Leval talks about 'revolutionary experience involving, directly or indirectly, 7 to 8 million people.'') Collectives were formed not just by peasants and industrial workers, but by lots of others, including, for example, hairdressers in Barcelona, Madrid and other cities. (The Anarchist Collectives, edited by Sam Dolgoff, pg.93, online here.)
The geographical extent of the revolution is reflected in these figures (from Dolgoff, pg. 71) for different regions of Spain: "Leval lists 1,700 agrarian collectives, broken down as follows: Aragon, 400 (for Aragon Souchy estimates 510); Levant, 900; Castile, 300; Estremadura, 30; Catalonia, 40; Andalusia, unknown. For the collectivized urban industries he estimates: Catalonia, all the industries and all transportation; Levant, 70% of all the industries; Castile, part of the industries--he gives no figures."
In the village of Magdalena de Pulpis a visitor asked a resident, “How do you organize without money? Do you use barter, a coupon book, or anything else?” He replied, “Nothing. Everyone works and everyone has a right to what he needs free of charge. He simply goes to the store where provisions and all other necessities are supplied. Everything is distributed free with only a notation of what he took.” [From Dolgoff, pg. 73.]
Economic productivity increased in both agriculture and industry where the revolution took place, despite the need to send soldiers to the front to fight General Franco's fascist counter-revolutionary military attack.
The following are excerpts from The Anarchist Collectives, edited by Sam Dolgoff, online here. The collectives varied from region to region, but what they all shared in common was a dramatic increase in economic equality and cooperative ways of doing economic work. As a result, productivity increased.
"{During the revolution peasants collectivized the land properties of Count Romanones:] The peasants altered the topography of the district by diverting the course of the river to irrigate new land, thus tremendously increasing cultivated areas. They constructed a mill, schools, collective dininghalls, and new housing forthe collectivists. A few days after the close of the Civil War, Count Romanones reclaimed his domains, expecting the worst, certain that the revolutionary vandals had totally ruined his property. He was amazed to behold the wonderful improvements made by the departed peasant collectivists.
"When asked their names, the Count was told that the work was perfomed by the peasants in line with plans drawnup by a member of the CNT Building Workers' Union, Gomez Abril, an excellent organizer chosen by the Regional Peasant Federation. As soon as Abril finished his work he left and the peasants continued to manage the collective.
"Learning that Gomez Abril was jailed in Guadalajara and that he was in a very prearious situation, the count succeeded in securing his release from jail and offered to appoint him manager of all his properties. Gomez declined, explaining that a page of history had been written and his work finished." [pg. 150]
This next excerpt is an eyewitness account of Graus, a "district situated in the mountainous northern part of the province of huesca."
"As in the collectivization of industry, similar procedures were applied to agriculture. In Graus, as inmany other places in Aragon, the first step toward socialization was organization of the agricultural collective. The Revolutionary Committee first tackled the most urgent problems: harvesting planting, overcoming the shortage of young workers (many were away fighting on the Aragon front), and still getting maximum yields from the land. Thanks to the strenuous effort and initiative of the comrades of the CNT and UGT, better ploughs and stronger horses were procured, and other improvements were made. The land was cleared and fields sown with corn. The agricultural collective was established on October 16th, 1936, 3 months after the fascist assault was repulsed. On the same day transportation was collectivized and other new collectivizations were scheduled by the two unions, the CNT (libertarian) and the UGT (socialist). Printshops were socialized on Nov. 24th, followed 2 days later by shoe stores and bakeries. Commerce, medicine, pharmacies, horseshoers' and blacksmiths' establishments, were all collectivized December 1st, and cabinet makers and carpenters on December 11th. Thus all social economic activities were gradually integrated into the new social order.
"There was no forced collectivization. Membership in the collectives was entirely voluntary, and groups could secede from the collective if they so desired. But even if isolation were possible, the obvious benefits of the collective were so great that the right to secede was seldom, if ever, invoked.
"Ninety percent of all production, including exchange and distribution, was collectively owned. (The remaining 10% was produced by petty peasant landholders.)
"The collective modernized industry, increased production, turned out better products, and improved public services For example, the collective installed up-to-date machinery for the extraction of olive oil and conversion of the residue into soap. It purchased two big electric washing machines, one for the hospital and the other for the collectivized hotel...Through more efficient cultivation and the use of better fertilizers, production of potatoes increased 50% ... and the production of sugar beets and feed for livestock doubled. Previously uncultivated smaller plots of ground were used to plant 400 fruit trees, ...and there were a host of other interesting innovations. Through this use of better machinery and chemical fertilizers and, by no means least, through the introduction of voluntary collective labor, the yield per hectare was 50% greater on collective property than on individually worked land." [pg. 135-9]
The collectives improved production in urban industries too. Here is an account of the metal and munitions industry:
"One of the most impressive achievements of the Catalonian metal workers was to rebuild the industry from scratch. Toward the close of the Civil War, 80,000 workers were supplying the anti-fascist troops with war materiel. At the outbreak of the Civil War the Catalonian metal industry was very poorly developed. The largest installation, Hispano-Suiza Automobile Company, employed only 1,100 workers. A few days after July 19th this plant was already converted to the manufacture of armored cars, hand grenades, machine gun carriages, ambulances, etc., for the fighting front. ... In Barcelona during the Civil War, four hundred metal factories were built, most of them manufacturing war material...
"Very few machines were imported. In a short time, two hundred different hydraulic presses of up to 250 tons pressure, one hundred seventy-eight revolving lathes, and hundreds of milling machines and boring machines were built. A year after the beginning of the Civil War, production of ammunition increased to one million 155-millimeter projectiles, fifty thousand aerial bombs and millions of cartridges. In these last three months of 1937 alone, fifteen million other war materials were produced." [pg. 96]
Adding to the evidence for the economic superiority of the egalitarian collectives is the fact that production during the revolution was seriously hampered by the facts that a) so many men were prevented from doing economic work because they had to be in the militias fighting to defend the revolution from the fascist attack on it and b) so much productivity had to be for war material rather than for things to make life better for people. People's standard of living would no doubt have been even greater were it not for this problem, a problem caused by capitalists and not by egalitarians.
Here’s an example of how the Spanish egalitarians organized industrial production
The following is an extract from The Anarchist Collectives (online and paperback) edited by Sam Dolgoff (published 1974, Chapter 7 pg. 94-96 paperback version, the essay by Augustin Souchy) describing what the workers did in the textile industry in the province of Catalonia.
The Collectivization of the Textile Industry
It is no simple matter to collectivize and place on firm foundations an industry employing almost a quarter of a million textile workers in scores of factories scattered in numerous cities. But the Barcelona syndicalist textile union accomplished this feat in a short time. It was a tremendously significant experiment. The dictatorship of the bosses was toppled, and wages, working conditions and production were determined by the workers and their elected delegates. All functionaries had to carry out the instructions of the membership and report back directly to the men on the job and union meetings. The collectivization of the textile industry shatters once and for all the legend that the workers are incapable of administrating a great and complex corporation.
Upon building the collective, a management committee of 19 was chosen by the rank and file membership. After three months the management committee reported back to the membership on the condition of the collective and the progress made.[53]
With the crushing of the fascist putsch, the owners transferred themselves and the assets of the industry abroad. But by cutting off dividends and premiums and eliminating high salaried directors and other wasteful expenditures, the collectives were able to pay the increased costs for raw materials. Two new machines for the manufacture of artificial silk were purchased from abroad. The necessary foreign exchange was raised by the sale of finished products abroad.
Every factory elected its administrative committee composed of its most capable workers. Depending on the size of the factory, the function of these committees included inner plant organization, statistics, finance, correspondence, and relations with other factories and with the community. Particularly significant was the organization of a top flight technical commission staffed by the most intelligent technical and administrative experts in the entire industry. This commission of engineers, technicians, and commercial experts drafted plans to increase production, division of labor, installations, etc. Several months after collectivization the textile industry of Barcelona was in far better shape than under capitalist management. Here was yet another example to show that grass roots socialism from below does not destroy initiative. Greed is not the only motivation in human relations.
Collectivization brought better conditions for the workers. The 60 hour work week in some factories was cut to 40. Wages were more equalized. Overtime work was abolished, and weekly wages increased from 68 to 78 pesetas. Wage rates were fixed by the workers themselves at union meetings.
A great many troops from the textile industry manned the fighting fronts. From Barcelona alone more than 20,000 textile workers of the CNT joined the militia. Non-combatant workers contributed voluntarily 10% to 15% of their weekly wages to finance the war against fascism, and in the last three months of 1937 contributed two and a half million pesetas to the anti-fascist militias.
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* I am not sure whether or not these three "facts" are true, but I am willing to accept them as true for the sake of argument, because they are irrelevant to any consideration of the relative merits of capitalism versus egalitarianism.
** Apologists for the Communist Party of China argue that it has dramatically reduced the number of people in China who live in poverty. This argument is very deceptive. Briefly, here's why.
First, people don't rely on money nearly as much in rural settings as in urban settings because in rural settings food and some other necessities are obtained without money, unlike in urban settings. This is the key to how the "China reduced poverty" argument is deceptive. Why? Because the definition of poverty is defined as living on less than a particular low amount of money per day; typically $1.90 is used. People in a rural setting live far more comfortably for less than $1.90 a day than people in an urban setting.
Second, China "reduced poverty" by moving people from a rural to an urban setting. These transplanted people suffered increased poverty as measured by their actual material quality of life, even though--because their new rural setting where money was much more important afforded them a bit more than $1.90 a day to live on--they now were "above the poverty line."
Read "Bill Gates says poverty is decreasing. He couldn’t be more wrong," by Jason Hickel
Read about the growing inequality in China at https://en.wikipedia.org/wiki/ Poverty_in_China#Increased_inequality .
*** See Why inequality is bad for you -- and everyone else and Income inequality hurts economic growth, researchers say, for starters.
****
We often hear that the Communist Party of China has lifted the Chinese people up out of poverty. To understand how false this claim is, read "Bill Gates Says Poverty Is Decreasing. He Couldn't Be More Wrong" by Jason Hickel (also see this same point made about Africa here). As Hickel explains, moving people from living in a rural society, where money is a relatively unimportant way of obtaining one's needs and people have less money, to an urban society where money is the only way of obtaining one's needs and people have more money, makes it easy to misleadingly say, "See, people were lifted out of poverty when they went from rural to urban living," even when the actual conditions of life for the urban people--working as horribly oppressed wage-slaves in huge factories--make their lives arguably worse than those of rural peasants. Millions of rural Chinese peasants have been forced to leave the rural countryside and immigrate to cities to work in the cheap labor and extremely oppressive factories, as described in some detail here.
In particular, the Communist Party of China in 1999 eagerly signed an agreement with the United States leading to China's accession to the World Trade Organization, which resulted in the reduction of tariffs on agricultural products and new limits on how much the Chinese government could subsidize farmers as discussed here and here [2003] ("Farmers of land-intensive products--particularly cotton, sugar crops, oilseeds, corn and soybeans--will be among the most adversely affected".) Life prospects for farmers, especially for their adolescent children, were made bleak and this motivated them to migrate to the cities for urban wage work.
In the rural homes they left, these farmers did not have very much money, nor did they need to rely solely upon money to get what they needed to live; but in the city they relied totally on their wage to buy what they needed to live--and it provided an abject poverty standard of living. The fact that their city wage was higher than whatever small amount of money they obtained in the countryside does not mean their standard of living was higher in the city than in the countryside; the opposite was the case. But apologists for the Communist Party of China point to the wage to assert that the peasants were "lifted out of poverty."
An indication of the terrible poverty--in terms of standard of living rather than magnitude of an urban wage compared to a rural wage--of China's urban factory workers who migrated to cities from their rural homes is this: these factory workers cannot even afford to raise their children (69 million as of 2018 or "1 in 5 children in China") with them in the city and so must leave their children to be raised by their grandparents in their rural home, which the parents can only typically afford to visit "a few days over the holidays every year." "By 2006, migrant workers comprised 40% of the total urban labor force.[51]"
Read here about the enormous economic inequality in China today.
The Communist Party of China oppresses and represses the working class much the same as Western capitalist governments do. Read about the repression here and here and here and here.