The Utopianism of Capitalism: Its Vision and Contradictions

by Gregory Lebens-Higgins

President Biden’s recent State of the Union Address outlines a vision in which capital remains ascendant but “the economy works for everyone.” This vision proposes that we can “build an economy where no one is left behind” within a capitalist framework. “I’m a capitalist,” Biden boasts, but wealthy individuals and corporations must “begin to pay their fair share.” He is quick to reassure, however, that “they will still make a considerable profit” (Biden, 2023).

Capitalism imagines a world of equilibriums and expansion without externalities such as air pollution and resource depletion. A capitalism in which the market efficiently distributes necessary commodities, provides economic opportunity and innovates to meet novel scenarios. Efforts to set up this “self-regulating market system,” writes left-leaning economic theorist Karl Polanyi in The Great Transformation, are “the utopian endeavor of economic liberalism” (Polanyi, 1985, p. 29).

Such selling points serve a propagandistic purpose. Free market champion Friedrich Hayek acknowledges their utopian appeal: “Free trade or the freedom of opportunity are ideals which still may arouse the imaginations of large numbers.” He goes on,

“The main lesson which the true liberal must learn from the success of the socialists is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote.”

(Hayek, 1949, p. 432)

On the left, “utopian socialism” is a term with negative connotations. In The Communist Manifesto, Marx and Engels depict utopian socialists as inventors whose blueprints are disconnected from the material conditions of society and wherein the “historically created conditions of emancipation” are to yield to their “fantastic ones” (Marx & Engels, 2002, p. 254). 

Proponents of capitalism also spout “fantastic” ideas of how capitalism will lead to universal freedom. Those who have experienced wage labor know the opposite is true, and that capitalism leads to poverty, precarity, and alienation. Engels, quoting Marx, says:

“‘Accumulation of wealth at one pole is, therefore, at the same time, accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole’ (Marx, 1967, p. 645). … And to expect any other division of the products from the capitalistic mode of production is the same as expecting the electrodes of a battery not to decompose acidulated water, not to liberate oxygen at the positive, hydrogen at the negative pole, so long as they are connected with the battery”).

 (Engels, 2020, p. 63)

Biden has repeatedly declared that “capitalism without competition is not capitalism: it’s exploitation” (Biden, 2023). But, as Marx demonstrates, all labor under capitalism is exploitation, with a portion of workers’ labor unpaid and going into the bosses’ pockets. “The directing motive, the end and aim of capitalist production, is to extract the greatest possible amount of surplus-value, and consequently to exploit labor-power to the greatest possible extent,” Marx writes in Capital (Marx, 1967, p. 331).

Competition is often touted as a cure for the ills of monopoly capitalism. We just need to break up big tech, and provide small businesses access to capital. But utopian depictions of capitalism do not account for the material constraints of competition. In reality, wars of competition are fought with cheap commodities by increasing the productivity of labor. “Such cheapening,” Marx says, “cheapen[s] the laborer himself” (Marx, 1967, p. 319). As a result of competition, large corporations beat out small business owners, the petty bourgeoisie slides into the proletariat, and the reserve army of labor expands. According to Marx, 

“Capitalistic accumulation itself … constantly produces … a relatively redundant population of laborers, i.e., a population of greater extent than suffices for the average needs of the self-expansion of capital, and therefore a surplus population.”

(Marx, 1967, p. 630)

After identifying the utopian implications of free market thought, Polanyi goes on to declare its material impossibility: 

“Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness.”

(Polanyi, 1985, p. 3)

The moderately regulated capitalism of the Biden administration has demonstrated the same unsustainable results.

Indeed, not all proponents of capitalism espouse a utopian vision of free trade and competition, or some version of regulated capitalism, that leads to global prosperity. Some are more honest. As capitalist theorizer Adam Smith stated.

“The man whose whole life is spent in performing a few simple operations … generally becomes as stupid and ignorant as it is possible for a human creature to become.”

(Smith, 1937, p. 734).

Many reactionaries embrace the inequalities of capitalism. Rush Limbaugh, for example, complained that “capitalism is always evaluated against dreams. Utopia is a dream. It doesn’t exist” (Limbaugh, n.d.). So long as there is a strong security apparatus to protect property, capitalism can continue to function as designed. Those at the bottom are meant to be there.

At its most extreme, fascism as a form of capitalism writes off entire segments of the population and openly espouses domination to guarantee the prosperity of a chosen people.

It is worth highlighting the utopian tones of capitalist proponents so that we can correct such misconceptions. We must fight against the propaganda of the deceptive liberties of the free market. In preparing for the overthrow of capital, we must sharply distinguish between changes that reinforce capital and those that challenge the system. 

Biden recommends several positive reforms in his State of the Union Address. He advocates for capping drug costs, reducing student debt, fixing infrastructure, reducing predatory fees, and protecting existing Social Security and Medicare benefits. He also identifies problematic consequences of capitalism such as the loss of jobs, corporate greed, medical insecurity, and gun violence.

But Biden’s rhetoric and policies will only work to reinforce capitalism and reproduce its unwanted consequences. Biden’s bipartisanship guarantees compromise with an undemocratic and radical pro-business Republican Party. Funding for law enforcement and anti-China policies will further entrench state violence and imperialism. And providing handouts to private contractors—who will win the bids to build roads, housing, and internet—fails to secure the democratic public utilities that we deserve. 

Because he believes that capitalism is a force that can be controlled to deliver prosperity to everyone, Biden’s policies fail to address the material failures and alienation at the core of capitalism. Like the utopian socialists designing blueprints disconnected from the material conditions of society, Biden’s capitalism is managed by benevolent technocratic planners removed from the strata of society that experiences its negative effects. Capitalism cannot be effectively regulated. Its processes of class differentiation are built into the system, and capitalists have effectively captured much of the state machinery. Rather than trying to improve capitalism to deliver on its empty promise of utopia, we must challenge the legitimacy of this vision. We must build an economy centered on the provision of necessities rather than the production of profit, with prosperity for all as its purpose rather than a byproduct.


Biden, J. (2023, February 7). Remarks of President Joe Biden – State of the Union Address as Prepared for Delivery.

Engels, F. (2020). Socialism: Utopian and Scientific. International Publishers. (Original work 1880).

Hayek, F.A. (1949). The Intellectuals and Socialism. The University of Chicago Law Review, 16(3), 417–433.

Limbaugh, R. (n.d.). Rush Limbaugh Quotes. BrainyQuote.

Marx, K. (1967). Capital: A Critical Analysis of Capitalist Production. International Publishers. (Original work 1867).

Marx, K. & Engels, E. (2002). The Communist Manifesto. Penguin Classics. (Original Work 1848).

Polanyi, K. (1985). The Great Transformation: The Political and Economic Origins of Our Time. Beacon Press. (Original work 1944).

Smith, A. (1937). An Inquiry Into the Nature and Causes of the Wealth of Nations. Random House, Inc. (Original work 1776).

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