Creative destruction and a capitalist paradox

6 min readFeb 5, 2021

There is no intrinsic moral failure in billionaires, nor is there any intrinsic moral failure in poverty; where there is moral failure is leaving citizens in poverty unable to live dignified and fulfilled lives while a few have access to wealth and privilege. Capitalism, at least in the neo-liberal form, places intrinsic virtue in accumulation and the centred self. You become your own yardstick, with moral failure for not rising out of base work and poverty. That society lauds you are virtuous says as much for it as it does about your circumstances. There is no absolute virtue in riches, fine art, aged wine, fast cars, or 5000 square feet apartments. Just as there is no virtue in breaking your back in a factory or nursing a sick person to health. The only value is what we choose to put on those roles.

Society needs nurses, bin people, shop keepers, handy people, recyclers, as much as it needs innovators, risk takers, and people who will push the envelope. It just happens to place more intrinsic cultural value in the risk taker than the care giver. Why should a nurse not earn as much as an inventor or mover of money?

Creative destruction, and risk, are necessary for progress. While pre-capitalist societies certainly had their innovators, without creative destruction progress was always slow and dependent on sovereigns for approval. Creative destruction is societally painful without careful stewardship, and even with the deftest of touch innovative technologies risk leaving multitudes behind. We face one such moment now as the machine-learning age ushers in a revolution in thinking, operating, and modes of being. Those innovators with access to capital, contacts, and luck stand to inherit the world; those who have been locked out of the system can only stand and watch as they pull further away.

This is the capitalist paradox: innovate and thrive, yet innovate and deprive. A billionaire is no more worthy of their accumulate capital than a destitute homeless person is worthy of their situation. Both are moral assumptions made by society, and while wealth is not intrinsically bad, the capitalist paradox places the risk taking luckster in the shrine of glory without caring for those who lift them into such hallowed esteem. No-one deserves to be wealth; hard work is never their labour alone, but part of an interlinked network of actors and actants, without whom hard work would be futile. For every billionaire there are tens of millions who work harder to scrape by, but without the material comfort to show for it.

Innovation has lifted billions from slum poverty, placed food on plates, made atrocious diseases a thing of the past. Capitalism is not a cardinal sin, nor is it the promised land. Billions have thrived, billions have been deprived. A handful became gatekeepers, yet there have always been gatekeepers to wealth and power. The structural issues within the paradox are not inherent within capitalism per se; no, the structural imbalances are present because the gatekeepers have designed it that way. Then blamed the inequalities on immigrants, queer folk, feminists, and any other minority that serves to shield those at the bottom from the reality at the top.

We say that greed is a bad thing, that accumulating too much is never a bad thing as long as you keep on spending. There is merit in avarice, demerits in societal service. The wheel breaks any who cannot, do not, and refuse to play capital’s gain, yet even those who do play have the deck loaded against them. The dirty trick consumerist capitalism placed on those at the bottom is that happiness is just a purchase away: comfort food, diet pills, liposuction, hair dye, designer clothing, credit cards, you are never good enough. Buy one more thing and that serotonin will flow for a second longer. And they find innovative ways to keep you on this treadmill.

Marketing was the canniest capitalist trick of the 20th Century, leading those who work by the nose and making us want. We want all the things, we place intrinsic value in cheaply made designer goods marked up to extortionate amounts, the value of Nike trainers and Apple products worth sweating and breaking our backs over. For every innovative vaccine and food crop comes clutter and tat, consumer goods to suck you in and spit you out with extra debt; keeping you on that treadmill and churning out a few billionaires at the top.

You would think that this is capitalism at its core, this rat race just to consume. Yes, and no. For the way we as a society choose to shape and mould capitalist enterprises shapes how this consumption occurs. There is nothing intrinsically definite about a consumption society. Why do we feel the need to purchase and buy? Why is it that our very mode of thinking is defined by what we consume? Marketing certainly holds a key, but so does the societal pressure to keep up and be part of the collective whole.

Would socialism and deep taxes on the wealthy break the status quo? Marx and his acolytes would like to answer in the affirmative. Give the means of production to the workers, allow them to fix the economy as they see fit. There is value in distributing profits to workers, as they will recycle it back into the economy, as will deep taxes on wealth over a certain amount. But none of this fixes the intrinsic consumerist problem at the heart of the paradox, and without fixing that you end up with either more billionaires or stagnation and a loss of innovation.

In addition, a Marxist approach does not tackle climate change, entrenched patriarchal oppression, endemic poverty and dispossession of those beyond our borders, and more fundamentally, does not address where the means of command and control will come from. Every system is flawed, and possibly the most effective solution with be a universal basic income social-capitalist society that embeds distributive innovation at its core. Socialism is not a dirty word, it just happens that in a neo-liberal economy it is corporations and billionaires who get the social handouts through tax breaks and lower tax rates.

To fix the paradox, and life all into equity, is a revolutionary concept. It is accepting that personal consumption makes beggars out of the many and billionaires of the few. It strips the planet of resources, poisons those who dig the natural resources, and breaks the back of workers from the factory to the packing plant. Our comfortable lives are inequitable because we depend on the many to lift us into comfort. Owning things is not a cardinal sin, but we as a society accept that what we own today needs to be replaced tomorrow because the advert tells us so. Only when we strip away the need for the next best thing, the next spending fix will equity start. Truly will the revolution not be televised, because all the screens will be empty of adverts.

How can there still be innovation? Surely that requires the next big thing? Innovation does not need to happen at a million miles a second; it can be slowed paced, redirected, rebalanced to fit the needs of society and the planet. You do not need a new phone every year, electronic manufactures can build gadgets that last decades rather than years, same for clothes and shoes. Slow consumption, better quality and fairer priced so poverty wages are eliminated, equity built into the very heart of our lives. A socialist revolution within a capitalist model, breaking down neo-liberalism into humanist capitalism that brings equity to all.