Nothing to Lose But Credit Cards

The influential Spanish sociologist and network society researcher Manuel Castells paraphrased the famous quotation from Marx’ and Engels’ Communist Manifesto in a very interesting way: “Proletarians of all countries, unite! You have nothing to lose but your chains!” became a sentence about today’s citizens of Europe, “They have nothing to lose but their cancelled credit cards!”. It is an expression meant to symbolize the failure of two intermingled societal constructs: financial capitalism and consumer society.

Capitalism is a term that is being very often used but, at the same time, very difficult to cut-credit-carddefine. Proponents and adversaries of this societal and economic system interpret it differently, but also within these groups there are essential ambiguities. Often enough the word is used as a slogan. To avoid this, I would like to define here capitalism consciously roughly as the economic system that has prevailed in the OECD countries over the last 30 years or so, including its societal repercussions.

I see myself neither as a proponent nor as adversary of capitalism. The current system is rife with problems and “fractures” and there is a great need for deep reforms. But I find the question uninteresting whether the resulting system should be called a “reformed capitalism” or rather a “post-capitalist society”. I leave the respective decision to others. What I think is important is what are the most daunting problems of capitalism and what should be done about them.

So, what are the capitalism’s fractures? Indeed, the list is thus long that I hardly can go through all the points in one single blog post. Therefore I would like to focus on three particularly interesting and important elements:

  • the decoupling of the financial system from the real economy and the production of real goods and services, and the resulting unequal distribution of wealth;
  • the alienation of the citizen, who is increasingly being viewed mainly as consumer (also by him-/herself), and the undermining of the foundations of societal life that is closely related to this;
  • the destruction of essential resources, particularly natural and social capital.

These three elements are all parts of the current crisis (or should we maybe talk of crises, in plural form?). All of them are symbolized in the above quotation from Castells by the cancelling of credit cards. For many people not only in the European South, but particularly there, it came to a disruption, they feel excluded from the capitalist order. Every one of the three elements contributes to this disruption and exclusion.

The first problem of (financial) capitalism and, simultaneously, the direct cause of the current economic crisis is that there is no direct linkage any more between real economy and the world of finance. Even though money is actually only an intermediary, a means to facilitate the exchange of goods and services, we witness people becoming “rich” through making money out of money, so to speak. One may call this virtual wealth, since it has no material or at least ideal (e.g., knowledge) equivalent. Conversely, it has the advantage that it can profligate very easily and seemingly without limits – at least until the next crisis. Modern society does not differentiate between virtual and real wealth, which creates huge inequalities in the distribution of wealth between those who engage in financial markets and those who do not.

Another critical characteristic of capitalism is that it is viewed primarily through the “economist’s lens”. Citizens are above all consumers and labour suppliers. A stable economy is the highest and most important goal and duty of every single government. Every private and, increasingly, also every public project is expected to yield. Which would not be as bad if the expected return on investments would not be defined so parochially, in monetary terms only. This trait of capitalism is particularly problematic because it seems to increasingly influence the self-perception of citizens. Before the crisis awoke many, western societies had become astonishingly passive. Of course, we still vote in national elections and read newspapers and fret about politicians. By and large, however, most people concentrated mainly on career, a home, good education for their children etc. These are all more or less important things, but what lacked and still often seems to lack is a wider perspective on the common good. We got used to leave this to the politicians, in the naive hope that they will make things better since “it is their job”. Public pressure seemed and still seems to many not necessary or not appropriate. No wonder then that lobbying groups have gained so much influence in politics – they are the only ones who try to protect their interests.

Last but not least the “official” topic of this blog – resources. The causes are manifold and complex, it is, however, a fact that capitalism facilitates short-term thinking and negligence of all what is outside the economy (particularly the natural environment). Thus, we have excessively overused the resources of our (only!) planet over the last few decades. But also social and human capital have been neglected because they are only partly captured by the economist’s view. The alienation of the citizen I mentioned in the last paragraph is undermining not only democracy, but also more generally human relationships, which depend heavily on common goals and common struggles of those involved. Meanwhile, the stock of social capital is crumbling, which leads, via segregation, ghettoization, gentrification and many other, similarly “creeping” processes, to the destruction of human capital. In this manner, capitalism is undermining its own foundation. At some point in time, credit cards are going to be cancelled and the consumer will cease buying. Next station: system collapse.

But Castells’s dictum can also be interpreted differently: as a call or a prophecy regarding the consumer society. A powerful symbol of the consumer society, viz. a society in which consumption has become an end in itself, is the credit card (by the way, US-Americans own over a billion credit cards, more than three times the country’s population). We have nothing to lose but credit cards, which are going to be cancelled in the crisis. In other words: we have nothing to lose but our wasteful lifestyle, whose continuance is being endangered by the crisis anyway. The central message of Castells’s research is the emergence, development and expansion of alternative lifestyles in the crisis-torn developed world. Lifestyles that stand in opposition to the capitalist mainstream culture. Cultures of sharing, sufficiency, civil engagement, common good-oriented innovations, emphasis of the real (contrary to the virtual financial economy) and cooperation instead of never-ending competition. All of this seems to have emerged in the wake of capitalism’s many crises and to have been strengthened by the current one, especially.

To a certain extent, today’s society is standing at crossroads similar to those at which Marx saw the 19th century worker class. The main difference is that we have to free ourselves from self-created chains. We have to free ourselves from a system we have created and sustained. It is not that much the rich, the symbolic 1% or Wall Street, who enslave us. Rather, we have imposed the burden of capitalism upon us ourselves, over the last few decades. Seen from this perspective it may be a lucky coincidence that capitalism is by now in crisis and that one may be doubtful about its ability to return to the pre-2008 shape. Maybe this is the opportunity to throw away the cancelled credit cards and to step towards a different future. No-one knows what this future may look like, even though the work of Castells and others provide some hints. But if we do not seize this opportunity, we can start preparing for the very probable collapse of the prevailing societal and economic systems. Such an abrupt break is likely going to be much more difficult to manage than a planned and wanted change.


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