Late Stage Capitalism is a socioeconomic theory which maintains that Capitalism is an historically limited stage. Proponents of this theory suggest that eventually the pragmatic rational decision making of capital economies will result in hyper-conglomeratization, lack of competition, automation and a redistribution of resources and wealth to those who already have the most capital. If this sounds familiar, it is because this historically limited stage has run its course; capitalism is no longer the most efficient economic model on earth. As the term suggests we are currently living in the end stages of this economic system.
Political scientist and author Frederic Jameson wrote a book about this term in 1991, Postmodernism, or the Cultural Logic of Late Capitalism. In his book, Jameson noted that the late stage of capitalism would come to dominate human beings – it is a moment where low and high art collapse, culminating in the postmodern consumerist stage where everything is commodified and consumable. Everything is for sale, and a few businesses begin to emerge as those who wish to sell you everything (Amazon, Walmart). In fact, most of what we buy and watch in the media is owned by one of less than ten conglomerates, as alluded to in the infographic featured above.
Some examples of this trend include conglomerates merging and buying up smaller companies to fold into their brand. Disney bought Marvel and Lucasfilm. They also own half the content you watch on television, including ESPN. Outside entertainment it is Amazon, who recently purchased Whole Foods, Ltd. For $13 billion in an effort to get into the grocery business in addition to selling just about everything else imaginable– and it is of course an entertainment content creator too. Yet it began as an online book store.
As rational economics suggest, these actors make decisions rationally, that is they make choices on the basis of sound logical principal in accordance with self interest. Businesses will make decisions rationally in order to expand value and increase market share in order to benefit share holders and themselves. It is this strict adherence to rational economics which also supports the theory that Capitalism is an historically limited stage.
Rational economics is not the best distributor of resources. In the early stages of capitalism there were many markets. Someone created a product, brought that product to market and those with means exchanged something of value in order to obtain it. When a competitor emerged with a similar product, it created competition. With competition, the market for a particular good or item would fall because there was ample supply of it. Since Capitalism adheres to rational decision making based on supply and demand, eventually these markets would be consolidated to better control prices in accordance with self interest. In order to act in self interest, many of these good-makers decided to merge and reap the benefits of lower costs of production, and higher profits for themselves. The result is less competition, higher prices, lower wages and extreme wealth inequality.
Capitalism is a ruthless system which does not care for the well being of its economic participants apart from those with the most means. It does not distribute resources efficiently because it was never designed to.
Case in point the global affordable housing crisis. A week ago, Grenfell Tower, a public housing complex in North Kensington burned to the ground killing around 100 people. The cause of the fire is not immediately known, but the lack of safety measures is. As the supply of valuable property in London and other major cities becomes scarce, investors moved in as rational decision makers looking to capitalize on real estate investment. The result is hundreds and thousands of properties taken off the market to act as land banks– investment properties, AirBnB rentals, and vacation homes for the rich both at home, and especially abroad. Instead of hearing Grenfell residents concerns, Kensington and Chelsea acted in accordance with rational theory as well. They chose to put the concerns of developers first and install cheaper flammable cladding to the Tower complex in an effort to save £5,000 and make the public unit look nicer to neighboring affluent residents which in turn raises more revenue. Not once did the Council or its contractors make a decision with the safety of its poorer residents in mind!
Rational decision making cares about one thing and one thing only – maximizing profit by reducing costs and acting with the benefits of the company or individual in mind. Nowhere in that calculation is labor, or negative externality considered. It is not to the benefit of the capital class to distribute resources to those with less. It is not to the benefit of the capital class to spend more to prevent negative externalities. The only thing which can do that is public policy.
What do we consider rights?
Is access to affordable and safe housing a right? Is it reasonable to make sure that those living in a given city have access to such housing before investment properties and those looking to make a quick buck off AirBnB? Should we tax or restrict investment properties in given cities where vacancy rates are low, and cost is too high? Is it reasonable to have housing that is safe and up to code?
Is access to affordable education a right? Is it reasonable to reduce the cost of college, including private elite universities so that middle and lower class residents can compete on the merits against wealthier students without burdensome loans? Should unpaid internships be made illegal so that those who cannot afford to work for free get the same experience early in their careers as those who can?
Is healthcare a right? Should we make a profit off of those who are sick or should we subsidize medicine and health services so that we can reduce cost and better distribute resources to those most in need regardless their economic background?
Is a clean and green environment a right? Should we place regulations to restrict polluting industries from contaminating the local community and furthering the climate change crisis? Should we take steps to prohibit certain products and methods of resource exploration to preserve life on earth and the safety of local communities?
Is access to financial products with clarity a right? Should we regulate capital markets so that institutions do not act without the well-being of their clients in mind? Should financial advisors be held to high standards and accuracy, and make decisions with their clients in mind? Should certain financial institutions have faster access to trading floors, which enable them to rig the market in their favor? Should roughly ten companies own everything we buy?
These questions must be answered by public policy makers. Late stage capitalism does not distribute resources efficiently because it is only concerned with self-interest. Therefore a capitalist market is not good at self-regulating itself and leading to the best possible outcomes for all. The logical culmination of this theory is mass inequality, lack of opportunity, fewer choices and the commodification of every aspect of life.
However not everything should be commodified. If we believe in meritocracy, we must make and lobby for policy which makes sure that resources are distributed in a more equitable manner. We must protect aspects of our society which unregulated capital markets do not value; such as the environment, the arts and those with less means to provide for themselves. We must encourage policy makers to take automation seriously, and make plans for a post-work economy. Finally, we must come to the conclusion that while Capitalism has done a lot of good for our world, it is no longer the most efficient system for all. It is time to look at what comes next, and how best to implement policy that respects both those at the top and at the bottom; a system which is equitable and based on merit. Late stage capitalism is a turning point in human history. Where we head next is up to the people and the world they want to see. It will be a tough fight, but it is a fight worth having – it is a fight for the future, and for a better world than the one we live in today.