The Psychology of Capitalism: A Beginner’s Guide

Takeaway: We don’t live in a vacuum. The structure of our culture, society, and economy can all play a part in both individual and collective well-being. 

In this post, I’ll cover the basics of the psychology of capitalism, including

• A brief history of capitalism
• Psychological impacts of capitalism
• Strategies to promote wellness under capitalism
• How to resist capitalism's hold

…and more.

The relationship between psychology and capitalism is not difficult to identify once you understand what capitalism is, why it started, and how it can end.

Capitalism is a political and economic structure (1) in which production is based on profit, not need. It grows and consumes, like a living thing. But unlike living things, it never pauses to savor, and it is never satisfied.

Capitalism creates a reality where necessities like water, food, and housing are privatized and not readily available to everyone. As it privatizes these necessities, it creates houselessness, starvation, and thirst.

There cannot be equality under capitalism, because it requires one party to extract from another. It creates hierarchies that then in turn create oppression. Capitalism has always relied on racial and patriarchal violence to continue on. It requires the oppressed to fight amongst themselves.

There is nothing natural about capitalism. Our ability to adapt to life under capitalism does not prove its validity, only human beings' natural desire to survive.

How does this affect us on an individual and community level? Let's talk about psychology and capitalism!

Understanding the roots of capitalistic psychology

Capitalism needs hierarchy among humans to exist. This is done by way of racism, patriarchy, and other forms of oppression. For this reason and many others, our mental health suffers greatly under capitalism (1). It is important to understand the history of capitalism, especially its role in the development of the United States and its rapid rise to power.

I will note here that the language I use when speaking about capitalism may be activating for some. Just as one cannot speak about the violence of imperialism and colonialism (2) without references to r*pe, extraction, enslavement, displacement, genocide, and murder, we must talk about capitalism's violent need to consume and destroy. That being said, take great care while reading.

Brief history of capitalism

Capitalism has only been around for about 500 years. It started in Europe at a time when labor was strong. The workers of the region had high needs and their strength was growing. Sound familiar (3)? Almost 40% of the population was killed during the plague that haunted Europe in the 14th century. Most of them were workers. This scarcity of workers created labor power, and the ruling class (4) at the time was terrified at the possibility of their loss of power. Feudalism had been on its way out for quite some time, and something needed to be done to keep the poor in their place (5).

The church's proximity to the development of private property, criminalizing the poor, the adherence to "morals" in setting prices, and elimination of secular expressions of community acted as a midwife towards the birth of capitalism.

The moralization of hard work (5) and vilification of the disabled and sick were the result of the church changing its orientation towards the poor to maintain control over the upper and mercantile classes: the ruling socio-economic classes.

These shifting tides and a power-hungry system brought about the beginning of capitalism.

Capitalism and the "new world"

The transition to capitalism was not natural. It was bloody and it was forced. Some will argue that our greed and pursuit of power under capitalism is just human nature. I will argue that it is our adaptability to capitalism that is human nature, not the former.

As stated above, capitalism does not savor or pause in its growth. It only expands by way of imperialism (6) and colonialism, or the forced taking, controlling, and extracting of lands outside of a country's borders.

Colonialism led Europeans to Turtle Island (7), forcibly taking it, drawing borders, and renaming it "North America" and "South America."

Early European settlers struggled in a land that had only seen indigenous hunters and gatherers. Agriculture brought its need for "families" of workers and cheap, exploitative labor.

As settlements grew, the genocide of the indigenous tribes (5) heightened. Settler colonialism (8) was practiced in North America, meaning that those who existed before the settlers were displaced and/or murdered. This is very similar to what is happening in modern-day Palestine (9).

General colonialism, by way of enslavement and/or forced cheap labor, was employed in South America (5).

But capitalism in North America needed more. More than simply exterminating the indigenous people and stealing fertile land, calling it their own. Free labor was needed to allow the genocidal project that was colonial America to thrive. The transatlantic slave trade was born (5).

The transatlantic slave trade brought up to 12 million enslaved Africans (10) to the US between the 16th and 19th centuries, mostly from West Africa.

The brutal treatment of Africans in the US was second to none, with generations of people being born into slavery and dying enslaved (10).

If we are keeping score, let's note that for a fully capitalist country to be born and exist it must steal land, commit genocide, enslave black and brown bodies, and extract from the land. Here is our first of many indicators that capitalism deeply affects our psychology, especially in the way we think about power, "growth" and others.

Capitalism's tools: oppression & division

If you were educated in the US, you likely heard at least one teacher or peer attempt to lessen the brutalization of slavery by way of the "gentle slave owner." Slave owners (yes, owners of people) who taught their slaves how to read, allowed them to sleep in beds, and provided them basic human rights were considered "good." Those who benefit from capitalism will always find ways to lessen its deadly, violent impact, framing history's worst offenders as "just doing their best" (5).

I reiterate: capitalism is not natural.

The use of indentured servitude popularized in the 17th century, brought many European lower and working-class "criminals" to the US as a form of debt bondage (11). "Steal bread for your family? Your punishment is to go work, for free, on a plantation in Virginia, USA until your debt is paid."

The threat of solidarity between European indentured servants and free/enslaved Africans brought about the need for legislation that discouraged, even criminalized equal relationships. This created race (5) in the US.

Freed and enslaved Africans were now black while Irish, Dutch, English, French, etc. indentured servants were now "white" (5).

This manufactured division between a group that naturally found solidarity with one another is something we still see today. Dr. Martin Luther King Jr (12) and "Chairman Fred" Hampton (13) were both murdered when their work towards uniting oppressed people of all colors, including poor/working white people, became popularized.

Psychologically speaking, the creation of race in the US brought about division, alienation, isolation from peers, unfounded anger towards those suffering alongside them, and identification with their oppressors.

This division not only further oppressed and isolated now "black" Americans, but eliminated the now "white" Americans' access to their former cultures and histories, uniting them under white supremacy (5).

Capitalism demands hierarchy

Does this "identifying with the oppressor" sound familiar? In modern US culture, working-class Americans, even the disabled and the poor, are manipulated to the point of hating their brothers, sisters, and siblings of similar struggles, only to identify with demagogues (14) like Donald Trump.

People are angry about capitalism. They are underpaid and overworked. Their relationships fail; their needs are not met and their health suffers. But when people can't quite connect the dots, when they're unable to name capitalism as the issue, people like Trump are ready to set the blame on immigrants, trans people, communists, and women (among others). This is similar to early 20th century anti-Semitism in Vienna and Berlin (14).

Psychologically, the individualism and alienation that capitalism facilitates leave us lonely, hurting, and angry at the wrong people. We are disempowered from making any real change.(14). But, how can we make this change?

I'm here to let you know that the enemy of capitalism is class consciousness, and it is achievable in our lifetime.

Breaking down the relationship between psychology and economics

Capitalism plays an important role in our psychology: our ways of thinking and behavior. Narrowing in on the ways we individually regard finances and economics as a culture can give us a better idea of that role. Let's talk about some ways that capitalism can warp our psychology around economics.

• Normalizing crowdfunding basic necessities. We often see stories with seemingly fairytale (15) endings: someone is in desperate need of financial support, only for a GoFundMe page to appear and solve the problem. We celebrate, often without questioning why crowdfunding is necessary to begin with. Why are we encouraged to celebrate something like housing or healthcare, which are basic necessities?
• Financial insecurity is blamed on the consumer. Currently, about 60% of Americans live paycheck to paycheck (16). We understand that the cost of living is extremely high (17), and needlessly so. But we still see how-to's on "How to Stop Living Paycheck to Paycheck" (18) encouraging decreased spending and more saving. It's the avocado toast argument (19), repackaged and sold to the millions of Americans it is affecting.
• Normalizing housing insecurity. Stories promoting living in cars and vans (20) are offered as a solution to high housing costs, without addressing the price gouging and boxing out of homeownership that the working class is experiencing. Over half a million Americans are unhoused (21) today. None of this is normal, none of this is needed. Houselessness is created by capitalism (22).
• ‍Media's influence and how we judge ourselves. Ever find yourself judging your stage in life, your relationship, or even your appearance, only to realize you're comparing yourself to a character on TV? It is easy to get swept up in comparing ourselves to beautiful people acting out life stories that feel similar to our own. But these characters are written by writers who can not only afford to live in places like LA or NYC, but who are also writing stories that are meant to go on for years, making money the entire time. Problem solving, good communication skills, and real growth can't exist in these manufactured worlds created by the wealthy.

• These are just some of the small ways capitalism affects our psychology around economics.

How capitalism can impact an individual’s own psychology

One can safely assume that capitalism's impact on mental health (1) suggests a profound connection between psychology and capitalism.

Capitalism teaches us that illness and disability are not just ailments we suffer from and/or live with, but they are impediments to productivity and the capitalist grind. We feel guilty, even terrified, of calling out of work (23). For good reason!

The concept of "mental health days" (24), while the intention is kind, only exists because we are driven to poor mental health by overworking. Many of us don't find fulfillment at our jobs, some even find their workplace/field unethical.

We constantly feel like we are not doing enough (25), and we are unable to be in the present moment with loved ones.

Our physical health often suffers due to the pressures of work, chasing status, hitting made-up life milestones, and managing constant guilt (25).

We struggle to stay in connection with spiritual practices and/or our religions, one of the last settings that offer community in modern life. We are disconnected from our bodies (24), from our emotions, from each other.

Human behavior outside of "rise and grind" (23) is looked upon with judgment, even pity. Younger generations who have profoundly less opportunity for financial, housing, and food security are moralized and judged.

We constantly struggle to connect the dots (24). But this is not our fault. The internal division is manufactured by the few on top that benefit from capitalism.

Capitalism causes undo suffering. There is no argument.

Understanding the social and cultural impacts of capitalism

Capitalism's need to ever expand has resulted in Western imperialism touching every corner of the globe. It consumes culture, ancestral practices, and ethnic pride, replacing it with nationalism, separating the colonizer from the colonized.

Transatlantic slavery, the Scramble for Africa (26), and the purposeful underdevelopment of the content have led to generations of war and poverty.

Central and South America have been so heavily extracted and controlled (27) by the West that any attempt at progressive politics (28) is squashed (or attempted [29]) by US-backed insurgency or military.

When Vietnam dared to say that they were done with French colonization (30) and accepted help from communists to liberate them, the US and France saw this as a major threat to Western hegemony and capitalism. This extension of the Cold War only came about because communism is diametrically opposed to capitalism and its bedfellows imperialism, colonialism, and fascism (30).

Capitalism has created a situation in which those in the Global North look with judgment and pity at those in the Global South like they are simply some far away, self-destructive entity that needs Western influence. They need to be managed or fixed. They are not human enough to do it on their own, and the noble West must fix it. How kind that the slave owners taught their slaves how to read.

Capitalism's ability to shift our material role from each others' caregivers to each other's keepers is tragic and intentional.

All this is to say that under capitalism, there can be no international solidarity. We cannot work to reverse climate change; we cannot solve world hunger; we cannot stop civil war and genocide. Capitalism creates all of these things. Capitalism needs the suffering of the many for the gain of the few.

Our material conditions will always be worse under capitalism, as will physical and mental illness.

Coping with the social and psychological impacts of capitalism

Must we suffer under capitalism? The impermanence of life means that there will always be pain and sorrow just as there will always be joy and moments of peace. In modern life, it's easy to get caught up in nihilism. But a better life is possible, even under capitalism. Here are some ways you can cope with the psychological and social impacts of capitalism.

• Talk with people in your community. Learn their names. Ask about their lives. Learn about their jobs or their illnesses and their interests. Ask if they need help with anything. Tell them when you need help with something. Create a network of reliance that combats isolation and nurtures connection.
• Make a positive impact on young people in your life. Each generation will continue to have a more difficult time than the generation before them. As an elder millennial, I understand what it is like to be misunderstood and to have your choices pathologized. Encourage your kids, nieces and nephews, younger cousins, and any young person you come into contact with to be curious.
• Be in the moment. Under capitalism, we are highly susceptible to anger and sorrow over the past, as well as fear and anxiety about the future. Spend time in nature, nourish your relationships, savor joyful experiences, find deeper understanding through spirituality, engage with humanity in a way that is restorative, etc. Learn things, let yourself be, feel your pain, relish in your relief when it comes. Engage in sensory exercises, meditate, tell someone you appreciate them.
• Find an org. There is nothing like good ole fashioned activism and community organizing. Living under capitalism can leave us feeling hopeless and frustrated. Identify your passions within social justice, and find a movement that fights for those passions. Climate justice for the environment? Black and women's lib? Reproductive rights? Socialism? There is something out there for everyone.
• Forgive yourself for not being perfect. To grow up under capitalism is to experience trauma. Alienation, individualism, and the general loneliness we experience can be debilitating. Unlearning ideas of capitalism like colonialism, racism, patriarchy, etc. is lifelong work. Be patient with yourself, do your best, learn from your mistakes, and do not let yourself ever stop growing.

FAQs about the psychology of capitalism

How does capitalism influence the psychological thinking of a person?

When we internalize the tenets of capitalism, we begin to base our worth on our ability to be productive. The phrase "internalized capitalism" gained popularity in 2019. Unlike "imposter syndrome" which works by holding individuals responsible for how they feel in traditionally wealthy, white, and male spaces, fighting internalized capitalism allows us to place blame on the systems of oppression that thrive under capitalism. It helps us to raise our consciousness.

This transition paved the way for individual success to instead be defined by how well we care for ourselves and treat others. But fighting internalized capitalism is an everyday struggle, and one must be diligent!

Just as you might suffer from internalized stigma (ex. internalized racism, homophobia, transphobia, misogyny, ableism, etc.), the only way to overcome this stigma is to identify it and work towards liberating yourself from it.

To recap, we've learned so far that capitalism can make us feel that we are not doing enough, that we aren't enough, and that those around us are the cause for our pain and suffering.

What is the mindset of a capitalist?

People turn to capitalism for different reasons. They may be born into capitalist families, essentially considering themselves royalty and worthy of exploiting others. Some become capitalist after being born into poverty, going from exploited to the exploiter (While this happens, it's rare. Poverty has always been difficult to escape, and these days, it's almost impossible.)

One commonly held belief among capitalists, regardless of their backgrounds, is that they feel they deserve what they gain from exploitation. Since capitalism rewards accumulation via exploitation and extraction, the capitalist begins to feel that what they are doing is "right" or "necessary". They will protect capitalism at all costs. Capitalists in the 19th century argued for the continuation of slavery while modern capitalists are anti-union and feel capitalism will fail without relying on child labor and undocumented, highly exploitable immigrants.

They may find it difficult to be in relationships that are not transactional. They may struggle to be in the moment, as they are addicted to profit-seeking. They are less likely to fight against social inequality and social justice causes, as it threatens their own position. They have little empathy for the plight of poor people and endorse the economic system that helps them maintain their status.

Capitalists can often likely have unhealed parental abandonment, as their own capitalist parents and caregivers likely struggled with connection. We see this with Trump and Elon Musk. Human life, the lives of others, are not considered when their own pain is acted out on the world.

Is this surprising? Their beliefs are validated by the existence of for-profit education and healthcare systems, their private property is protected by police and their wage theft is not punished, and lawmakers are beholden to big business, their own interests. Should we be surprised that capitalists behave and think the way they do?

One of my favorite podcasts, Rev Left Radio, had an episode recently that broke down the struggles of every social class in capitalist society. Of the ruling class, the billionaires, politicians, and those with legitimate power, it was said that they suffer from a constant fear of losing their capital accumulation. They witness unhoused people on their streets, they become paranoid towards friends and family, and they suffer in a way that only a member of the ruling class can suffer.

Somewhere deep inside, they know that their wealth was acquired via wage theft and exploitation, so what was stopping someone from stealing it all from them?

Is it okay to be angry about capitalism?

Not only is it ok to be angry about capitalism, it's expected. Capitalism is the cause of micro-level issues like racist police violence and chronic houselessness, as well as macro-level disasters like genocide and climate change.

Capitalism improves the lives of a small group of people while slowly (at times quickly) immiserating the lives of everyone else. Capitalism alienates us, leaving us to feel that our suffering is our own fault. Not making enough at work? Can't afford a home? Have less success than your parents? The forced individualism under capitalism leaves us isolated.

What can I do about my anger over capitalism?

I urge you to lean into the anger you feel about capitalism. Under anger, there is always grief, sadness, fear and/or despair.

As stated above, humans existed and thrived before capitalism, and we can do it after.

Get involved in your community. Find an organization that has an anti-capitalist framework. Find an area that you feel passionate about and agitate the status quo around it. Climate change? Healthcare? Prison abolition? There are many areas where your energy can be placed.

Share your skills, and put the energy from your anger towards working for a better world.

Therapy can help you cope with the pressures of capitalism.

The link between psychology and capitalism can be used as a tool. It can help us measure the negative impact on our quality of life, gearing us towards making a collective change.

As a socialist therapist and coach, I meet with clients around the world who can all identify the same stressor: capitalism.

In session with me, your anger, passions, and focus will not be pathologized. Your militant support for oppressed and occupied peoples, your rejection of the status quo, and other passions will not be dismissed or minimized.

As anti-capitalists, we are burdened with the pull between knowing there are better options than capitalism and needing to survive under it. In session with me, you will learn ways to care for yourself while maintaining your passions and your energies. You are fighting for a better world, and you deserve to survive and even thrive until that world is reached.

Visit my blog here. I post entries similar to this one, applying my lived experience about surviving capitalism and fighting for a better world.

Here is my website, and my besttherapists.com directory listing!

Like what you've read so far and ready to schedule a consultation? Let's go!