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Which Creates a Higher Standard of Living: Capitalism or Egalitarianism?

by John Spritzler

January 24, 2014

[Also see "What Replaces the "Free Market" in a Sharing Economy?"]

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 Chinese Communist Party 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 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 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.


* 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 Chinese Communist Party 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 about the growing inequality in China at 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.



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