On the wastefulness and inefficiency of capitalism

A good friend of mine was questioning the pro-capitalist logic of “competition brings out more creativity” and asked (semi-rhetorically),

“I imagine that a LOT of resources are wasted on things like marketing, corporate espionage, lawsuits, duplication of efforts, etc. Does the ‘creativity boost’ of competition balance out the waste?”

I wanted to share what I commented to add to his point about the wastefulness of capitalism:

you kind of mention this, but there are also certain jobs like insurance-company actuary that would just totally disappear if we decided to just give everyone healthcare. no need to decide how much to charge someone for insurance if they just get the care no matter what.

and more deeply, it also depends on what we’re counting as a good return on resources invested. the standard claim is that the intrinsic value that businesses create can be precisely and directly measured by the amount of money the company receives.

but really, one could take relatively small amounts of resources and give them directly to the poor people of the world in the form of infrastructure and land, and one would have created so much more value than if one used that same amount of money to buy this year’s laptops and trucks and clothing etc. for the wealthy.

but of course, what is produced is what makes money, which depends not at all on how much value it adds to human life but on whether it can be sold to those who already have expendable money.

relatedly, there’s also the fact that if something that has already been produced and it would hurt profits to sell it, it is destroyed rather than given away.

there’s also planned obsolescence.

there’s also the incredibly environmentally destructive nature of capitalism, which collapses natural systems through overusing them that otherwise would have provided steady supplies of resources and “natural services” indefinitely (http://bit.ly/CapitalistEcocide).

there’s also war, which you do mention already in the form of competition, but it’s probably worth noting that capitalism makes war inevitable (http://bit.ly/capitalistmassmurder), and virtually all production of armaments and troop-shipping and troop-housing etc. is pure waste. along those lines, there’s also the cost of law enforcement, which would be so dramatically smaller in a world where everyone had what they needed.

and also the way so many are left to starve, and turn to drugs etc., and human potential is eaten up in addiction, distraction, fear, and trauma, etc. this is probably the single greatest inefficiency, given the power of even one all-around(-or-close-to-it) healthy human being.

and truthfully, we even have evidence that the very claim that capitalism is better than socialism at building up advanced economies efficiently is false, like how the ussr was the third-fastest growing economy in the the world for the span of time it existed, and in fact that it grew even faster during the years when (in my opinion) their planned economy was genuinely democratically planned (http://bit.ly/doplanned).