@o_o@programming.dev asked “why are folks so anti-capitalist?” not long ago. It got quite a few comments. But I noticed a trend: a lot of people there didn’t agree on the definition of “capitalism”.
And the lack of common definition was hobbling the entire discussion. So I wanted to ask a precursor question. One that needs to be asked before anybody can even start talking about whether capitalism is helpful or good or necessary.
Main Question
- What is capitalism?
- Since your answer above likely included the word “capital”, what is capital?
- And either,
- A) How does capitalism empower people to own what they produce? or, (if you believe the opposite,)
- B) How does capitalism strip people of their control over what they produce?
Bonus Questions (mix and match or take them all or ignore them altogether)
- Say you are an individual who sells something you create. Are you a capitalist?
- If you are the above person, can you exist in both capitalist society and one in which private property has been abolished?
- Say you create and sell some product regularly (as above), but have more orders than you can fulfill alone. Is there any way to expand your operation and meet demand without using capitalist methods (such as hiring wage workers or selling your recipes / process to local franchisees for a cut of their proceeds, etc)?
- Is the distinction between a worker cooperative and a more traditional business important? Why is the distinction important?
I’ll toss my two cents in
What is capitalism?
Capitalism is a form of economy where individuals are allowed to obtain, keep, and distribute capital as they see fit, so long as they have the means to do so.
What is capital
Capital is a combination of property and money. Property being the things you own, with money being a measure of potential property you don’t yet own.
How does capitalism empower people to own what they produce?
It’s at the core of the concept. Individuals are allowed to obtain, keep, and distribute capital as they see fit. You and you alone own your capital.
I see a lot of comments saying workers are not allowed to own what they produce. That their employer takes it from them. I feel this is flawed and possibly comes from a place of frustration. So let me ask this: What does an employed worker produce?
If that worker is a self employed craftsman making sprockets, the answer’s clear. They produce sprockets. They can then go out and sell those sprockets for goods, services, or money as they see fit.
If that worker is employed by a sprocket making company; they still make sprockets, but that’s not what they produce. They produce labor. Which they’ve chosen to sell to the sprocket company for money and/or other benefits. They may not care about sprockets themselves, don’t go to sprocket conventions, and certainly don’t want to deal with figuring out how to sell all the sprockets they’re making. It’s a better deal to sell your labor and use the profit you make off your employer to do the things that actually interest you. It’s your employer’s job to handle everything else.
Note that selling your labor is no different than selling capital. You set the price you’re willing to accept, and your employers (who are your consumers) can accept that price or not. That doesn’t mean you can set your price at any number and expect it to stick. Just like how the price of sprockets is dependent on consumer need and competitive prices, so is the price of your labor.
Bonus Questions!
Say you are an individual who sells something you create. Are you a capitalist?
If you also exist in a capitalist economy, then yes.
If you are the above person, can you exist in both capitalist society and one in which private property has been abolished?
No. Capitalism cannot exist if you don’t have control over your own property.
Say you create and sell some product regularly (as above), but have more orders than you can fulfill alone. Is there any way to expand your operation and meet demand without using capitalist methods (such as hiring wage workers or selling your recipes / process to local franchisees for a cut of their proceeds, etc)?
Yes. Ideally you raise your prices so fewer people buy your product while you still make the same profit as if you were filling those extra orders. Alternatively, you can work to optimize your production methods to create more product in the same amount of time. Be it finding more efficient methods you can practice to make each product, or creating or purchasing equipment which can make each product faster. The balance between price and optimization is up to you.
Is the distinction between a worker cooperative and a more traditional business important? Why is the distinction important?
It’s a term to describe a type of business. No different than “corporation” or “partnership” or “nonprofit”, among others. The distinction’s important in that there’s value in being able to describe different types of businesses.
I think this answer misses the mark a little bit with regards to the context of what it is about capitalism that causes so much controversy.
People who critique capitalism aren’t usually advocating for an economic system completely devoid of private ownership (though some are). They’re often raising issue with a certain type of capital ownership.
Say you’re the owner of a sprocket manufacturing corporation, and I’m a worker. You yourself don’t work, you just inherited a sprocket empire from your grandfather, who founded that sprocket empire using funds from selling his emerald mines that were worked by slaves.
I put in an honest days work 5 days a week, and in those 5 days, I produce $2000 worth of sprockets. It costs $10 per week to maintain the sprocket machines, $10 per week for electrical power to cover my sprocket making activities, $30 per week to repay the loan that was taken to build the factory, and $50 per week in other miscellaneous expenses needed to allow me to make sprockets.
That means that of the $2000 worth of sprockets I produced, $1900 of profit was generated.
You pay me a salary of $500 per week, and collect $1400 per week from my (and each other laborer’s) work.
The point of criticism is that you’re accumulating wealth, which other people had to work to produce, without doing any work yourself. You’re simply a parasitic freeloader on society because of an arbitrary concept of “ownership” over something that you don’t use personally.
Some responses to these criticisms include the following:
“You should just negotiate for a higher salary, or go work somewhere that’s paying more.”
This is the example from classical economic theory, and there are a whole handful of reasons that it doesn’t work. The voluntary exchange between a worker and a capitalist (meaning one who owns the means of production) isn’t actually (fully) voluntary. A worker who finds his working conditions unsatisfactory can’t reasonably just choose not to work. The threat of financial ruin, homelessness, and starvation act as a metaphorical gun to the head of the laborer giving the capitalist a significant negotiating advantage.
Add to this the fact that it’s been theorized and demonstrated that capitalism tends toward regulatory capture and monopoly, and you have a situation where the means of production become more and more concentrated in the hands of a group of elites, while the workers’ bargenaining power becomes weaker and weaker due to less competition in the labor market.
“The capitalist deserves the profits that they extract because of [this work that they’ve done]”
If the owner of the factory is functioning as a floor manager, they should be paid a fair salary for being a floor manager. If they’re working as a director, they are entitled to a director’s salary. These critiques of capitalism aren’t saying that there should be no hierarchy in an enterprise (though some alternatives to capitalism do call for that). Just that the only people who are entitled to the wealth from something that’s produced are those who are working to produce it.
This same thing goes for other forms of capital ownership too, by the way. Landlords are a classical example. I’ve heard it claimed that landlords are entitled to their rents because many of them work so hard at repairs and managing their properties. They’re totally entitled to be compensated for any labor they engage in, but the wealth that they extract from tenants far exceeds the value of the labor that they supply. Which is kind of the whole point of rental property, if “investors” couldn’t extract a passive income (income in excess of work performed), they wouldn’t be buying homes and then renting them out.
I think you’ve written a good, neutral summary critique that increases our common ability to debate this. Thank you.
I would argue, however, that your example makes it sound especially egregious as the profit margin in your example is 95%. The advantage of capitalism, according the people who support it (like I do), is that other sprocket making companies exist and together they bring the profit margins down and down and down (due to competition), forcing continual innovation to bring it back up. Thus, not only is the profit margins typically much, much smaller (1-10%), but society collectively advances, which benefits the workers too as the produce they need to acquire increases in quality and lowers in price.
The truth is probably somewhere in the middle.
So I agree with you when arguing against monopolies.
Capitalism has 3 main features:
- Private property (even in land)
- Employer-employee relationships
- MarketsCapitalism is misnamed. Early theorists mistakenly identified capital ownership as the root feature that gave the employer the right to the whole product that workers produce. The employment contract gives the employer the right to the whole product of the firm. Coops correct this. Power leads to employers typically being capital owners, which is why the misnomer stuck. @asklemmy
It took me all day to understand this one, but that is an excellent point. We do mislabel the problem. Those employment contracts are indeed far more damaging than capital itself. Thank you for this perspective.
I would recommend reading David Ellerman to get more of this perspective. Here is a link to a text where he argues that the employment contract is illiberal, which means that it violates liberalism’s fundamental principles, and the only kind of economy that is compatible with liberalism is an economic democracy where all firms are democratic: https://www.ellerman.org/wp-content/uploads/2020/03/Article-from-ReclaimingLiberalismEbook.pdf
Capitalism is a socioeconomic system in which private individuals (capitalists) own the means of production and employ others to work them. The employer exploits the employed through wage labor, a system in which the surplus value of a laborer is taken as profit for the capitalist. Capitalism is often characterized by market relations and generalized commodity production, but there are always exceptions as in any system.
I think your first point is the most important: it’s a system in which those who own the means of production, those who benefit the most from production, produce nothing.
I know I am doing your homework here
The reason I am posting this anyway is that I hope you’ll learn something from it. Please read it and try to understand it.
The first thing to say here is that capitalism/communism is not a binary thing at all, even though many people (especially from the US) seem to believe.
Instead, there is a whole spectrum between pure capitalism and pure communism. In fact, there has never been any large-scale real-world implementation of either pure capitalism or pure communism.
But let’s start with definitions.
Pure capitalism
In a pure capitalistic system, the state basically doesn’t exist. This is often called anarchocapitalism, because for pure capitalism to exist, you also need an absence of government => anarchism.
In such a system there is no regulation, no taxes, none of the basic services are provided by a government. Instead, money is king. In pure capitalism money doesn’t equal power, it is the only power. There is only a completely free market as the only mechanism that is supposed to balance anything out.
Pure communism
In a pure communist system, there is no private sector and even no private property. The whole power lies solely with the state, money has no meaning. For the state to be able to really govern everything that a capitalist system does with money, it pretty much needs full control over everything.
Why can pure capitalism not work?
In a pure capitalist system, if you have more money, you have more power, which makes it easier to gain more money, and with more money comes more power and so on. Without any regulation the free market is unstable and tends towards monopolies. Basically, once you gain an advantage over your competitors, you can use your money to suppress or buy out your competitors until there are none left. If anyone tries to enter your market segment, you just buy them out or e.g. buy their suppliers. (Google Standard Oil for a good example.)
So for the free market to work, you need to have regulation.
The other side here is that in a completely free market, employers have ample options to exploit their employees. Until they band together, strike/revolt/start a revolution, and make sure that the free market isn’t as free any more, meaning that they get treated fairly and get a bigger share.
Why does pure communism not work?
Well, even the Sowjet Union wasn’t a pure communistic system. There is some level of personal property that people need to have as an incentive to work. If it doesn’t matter what you do at work and you always get the same reward, no matter whether you even show up for work, then your system will also fall apart.
What exists between capitalism and communism?
There’s a massive spectrum in between. There are countries that are quite capitalist, like the US. Here you have a mostly capitalist system, but basic services are still provided by the state.
There is social market economy, like many European countries are using. Here you have state-owned companies in all important sectors, that have to compete with private companies. More than just the basic needs are covered by the state.
And then you have something like the UDSSR, which is mostly communist, but you are still allowed to have some private property.
Back to your questions: Since your answer above likely included the word “capital”, what is capital?
Capital is any kind of property belonging to persons, that can be used to influence the behaviour of others by trading. Money, companies, stocks, real estate, basically anything that can be sold. Depending on the specific system, even humans.
How does capitalism empower people to own what they produce? Or, how does capitalism strip people of their control over what they produce?
The question really misses the point. If you have the capital, it the product will belong to you. If you don’t, it won’t.
Say you are an individual who sells something you create. Are you a capitalist?
Again, misses the point. If you are a slave who produces something and then has the task to sell it for your master, you definitely aren’t a capitalist.
If you are the master, who doesn’t produce and doesn’t sell, but earn from the work of others, then you are a capitalist.
If you are the above person, can you exist in both capitalist society and one in which private property has been abolished?
False dichotomy. Neither a pure capitalst nor a pure communist society exists.
Say you create and sell some product regularly (as above), but have more orders than you can fulfill alone. Is there any way to expand your operation and meet demand without using capitalist methods (such as hiring wage workers or selling your recipes / process to local franchisees for a cut of their proceeds, etc)?
Again, false dichotomy. Cooperation also exists in a communist-oriented (or even a theoretical pure communist) system.
And actually, even in a capitalist-oriented system you don’t have to use any of these methods. You can just cooperate with others on a same level. E.g. I build X to sell. I could ask someone to join and that person could run their own business side-by-side doing the same thing. We wouldn’t need to have a business partnership at all. Both independently build and sell. Of course, that would mean that I’d have no control over the other guy and I don’t earn money from their work. But there’s no law telling me I have to.
Is the distinction between a worker cooperative and a more traditional business important? Why is the distinction important?
Yes, google it yourself.___
I think your misundertand the concept of private property and communism. Which could be skewing your opinion on the matter
In pure communism, there is no private or personal property.
But there has never been any purely communist society of significant size or duration, specifically for this issue. There have been a few short-lived small-scale experiments, like e.g. the “United Order” the Church of Jesus Christ tried to implement in the 1830s among it’s members, but even with this being a voluntary thing among a religiously motivated group it didn’t even last a year.
I have to agree with @arvere@lemmy.ml, you aren’t working with an accurate definition of communism. You said pure communism revolves around the state which is explicitly false. Pure communism is, by definition, moneyless, classless, and stateless. Historically, there have been state-socialists who believe that sort of system can provide a viable alternative to grassroots revolution in transitioning from a capitalist to a communist society. However, pure communism is anarchic, there is no state. Cooperation is spontaneous.
Additionally, it does not preclude personal property: items an individual keeps for personal use, e.g. your house, your car, your TV. What it does preclude is private property: items an individual keeps to charge others for their use, e.g. a rental property, a taxi, a movie theater.
Respectfully, you might want to brush up on your communist theory.
I might have simplified, but the points remain exactly the same.
If the system (Question, who is the system?) precludes (Question, who precludes?) from renting property (Question, who determines what what renting is?), there needs to be a system in place that needs to enforce all that.
Otherwise you aren’t talking about communism, you are talking about anarchism. Anarchism has no inherent link to communism, so if communism is supposed to exist at all, it needs a government. There is no way around it.
If we go by your distinction between personal and private property, what is to stop anyone from renting out their personal property? If I have the coolest movie projector in the community, what is stopping me from charging for access in an anarchist society? If I have more, I can make more and then I’m a capitalist again.
But explaining one impossible construct (pure communism) with another impossible construct (anarchism) doesn’t make the first one more probable.
Anarchism is inherently a non-stable system. You have natural power imbalances and anarchism has no mechanisms to balance them out. An anarchist society where no democratic processes are used leads directly to mafia-like organisations taking control.
Anarchism is based on the idea that a power vacuum is sustainable.
Anarchism has no inherent link to communism
Where did you get that idea? Anarchism is explicitly a left-wing political ideology that emerged from general socialist thought. The two are intimately linked in their development, and heavily influenced one another with the “purest” form of either by their own principles independently culminating in anarcho-communism. You can debate the viability of this system all you like, but the definition of the term is what it is.
It is defined as implicitly free of hierarchies, including the state. If you want to talk about a system with a state, you’re no longer taking about communism. We can talk about pragmatic incarnations of socialist policy, we can talk about the conditions necessary to foster a communist society, we can talk about the consequences of either. But if the subject is the definition of communism, none of that is relevant.
If we go by your distinction between personal and private property, what is to stop anyone from renting out their personal property?
A lack of money for one. The existence of other cool projectors, if you didn’t build the cool projector by yourself, that can be communally held. If you built it yourself, and decide to hoarde it yourself, presumably other members of the community would hesitate to share their cool stuff with you. Patents and IP are private property, so anyone with skill in projector-making can try to copy it.
If you recognize the benefit of sharing your cool stuff in exchange for others sharing their cool stuff with you, everyone gets to use lots of cool stuff. If you hoarde the cool stuff you personally invented, no one will let you use the cool stuff they personally invented, and you’ll only get to use the cool things you personally invented.
Have you never heard of anarchocapitalism?
I’ve also heard of vegan milk.
As others have pointed out, it’s an oxymoronic misnomer used by right-wing “libertarian” neo-feudalists. The hierarchy inherent to capitalism is fundamentally incompatible with anarchism.
Capitalism is an economic system where capital is considered a valid input to the production process, worthy of renumeration. Contrast with some other systems where labor is the only valid input.
Capital is material wealth used productively.
Capitalism empowers ownership of produced good by laborers by funding new ventures where laborers can be more self-directed than if they were forced to labor under the direction of others. Capitalism erodes control from laborers by introducing a non-labor stake in the venture. Both are true.
An artisan who sells what they produce is free to be a capitalist or not, the two are unrelated.
Such a person cannot exist in a society without private property, as “selling” is not a valid concept in such a society. Artisans in general would still exist, though, and probably more abundantly.
An artisan who has more work orders than she can fill alone can expand without the methods you describe. She can form a partnership with another artisan, and teach or otherwise share her methods of production, tools, and branding. This could be an equal partnership or something more like taking an apprentice.
The distinction between worker coöps and other businesses is important, but it’s also important to recognize that coöps are a subset of businesses, not an opposing type of entity. Coöps have just as much ability to behave in a predatory manner towards consumers, and almost as much potential to seek self-perpetuation and growth at the expense of their environment. That they will be less predatory towards laborers is nice, but it’s not enough to make them “safe”.
Hot take, but it’s mostly a buzzword at this point. It more productive to talk about wealth distribution and the structure of industry directly, and in which ways they can be good or bad.
