Good to distinguish between a market and a mode of production -- you're absolutely correct that the elision of the two erases the possibility of meaningful discourse on the term "capitalism." Regarding the caveman hypothetical, I think it's important to remember that the idea of money-based markets as descendants of direct barter itself is largely mythic. Erald Kolasi wrote this particularly insightful note on that element of the whole natural fallacy: https://substack.com/@technodynamics/note/c-125005177?utm_source=notes-share-action&r=47lytd
That's a fascinating post! I'll admit I held what Kolasi describes as the 'standard version' idea of money. So it's something I'd like to learn more about. Thanks for sharing.
Buddy, you gotta read David Graeber. From what I recall, Kolasi is still overstating the significance of "mutual exchange" here, though I could definitely be wrong: He points out that paying back a social "debt" with something of "lesser value" was considered insulting, but I think "paying back a debt" at all - as in, zeroing out accounts entirely such that all obligations ceased - was also insulting, as it implied that you didn't intend to interact with the other person again. Instead, people would "pay back debts" with a little extra; I owed you, now you owe me, back and forth.
“It’s a dog eat dog world” is such a stupid statement because it isn’t. A dog will only eat another dog if things have gone very badly wrong for both dogs. The reality is that we live in a “dog support dog” or “dog sometimes prioritise the needs of the community ahead of themselves” world. Dogs are pack animals, successful because they cooperate, just like humans.
"...it’s that they misunderstand capitalism." Yes, perhaps by design. People say its 'owning the means of production' without understanding the instrument of power, the means of ownership. If you sell something do you think you're a capitalist? People used to have a better understanding of who the capitalists were and a considerable history of trying to change the system.
Capitalism began as a French word, “capitalisme,” used to refer the owners of capital (the money) and their system of war finance, or the practice of borrowing large amounts of money to fund the costs of war.” War debt was in fact how the capitalists got nations to hand over their monetary authority to the wealthy private interests who controlled large accumulations of money. So, capitalism dominates the ownership of the raw materials, the means of production, exploits earth’s resources and labor, concentrates wealth, creates poverty, drives destructive growth, predatory competition and all wars. That is what capitalism does …but what IS capitalism?
What does the word literally mean? I put it this way:
Capitalism = (capital = money) + (ism = system) = money system. The central feature and source of the awesome power of the capitalists is the debt-based private global monetary system they own and operate through the global banking system. Capitalism is often wrongly conflated with “free enterprise” and “free markets” but capitalism ensures that these are NOT free. This is because Capitalism is a debt parasite on the back of free enterprise making every household, business and government in this world in debt and dependent on the banking system. Abuse of the monetary system for personal gain is the definition of usury.
Frederick Soddy wrote that money; in order to be the distributive mechanism for society it must adhere to certain democratic principles. “To allow it (money) to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.” This is where we are.
That Soddy quote is spot on. I've always seen it as a problem that money is discussed as property first, a currency second. That always seemed like a bad way to lead to money interests superceding the state, and by extension public interests.
It gets better the more ancient history you study. Yeah - currency was a comparatively recent invention, we existed as a species first a hundred thousand years or so before inventing it. So ok, for a period before that in many regions seashells or beads were used as currency but before that… well owning things only really became a big deal after the invention of agriculture, because then you had a whole class of people who would have no food until their crops grew. Prior to that, if you were hungry, you would just go and get some food. The amount of time people spent getting food is believed to have been considerably less than an eight hour working day every day too.
in most cultures, in most places, once agriculture developed, the first stage was something that sounds a lot like communism: the growing would be planned by the state, food would be harvested by the state, stored by the state, and distributed as rations. This happened all over the world. China, Mesopotamia, Egypt, the Inca (albeit they were considerably later, they weren’t the first civilisation in their region) Individual farmers were not receiving salaries and then going to the shops to buy the food if their choice.
One of the defining criteria for the development of civilisation is the emergence of inequality. In prehistoric communities there weren’t really rich people and poor people. Didn’t happen until cities happened, which happened within the last 2-3% of the time Homo sapiens have been on the planet. Before that we were all equal.
Pre-agricultural prehistoric communities have also often been found to include adults with severe disabilities from birth. People who would not have been able to support themselves, and to reach 40, must have been supported by multiple generations, both people older and younger than themselves. The default state for humans is that we carry our weak. Why? How does this work in a Darwinist context? Well: what does it tell the community? It says, we will support each other. It’s an amazingly powerful bonding tool. I can see why evolution would have put that there.
People who say that capitalism is the default state for humans are betraying that they have no knowledge at all about their own history. Even if you use “capitalism” as shorthand for any system of buying and selling (which is technically inaccurate): it’s still a very recent innovation.
Marx said it best: 'Human nature is driven by material conditions.' If you were a hungry hunter-gatherer, you would form a band and go scavenge for food. You certainly wouldn't configure a capitalist mode of production to sell the hours you searched for food as a commodity to earn a wage so you could buy food.
At the family level, people don’t default to competition. No one expects kids to pay rent at age five or pay for healthcare. If capitalism were natural, we’d see market dynamics in families too. We don’t, because cooperation is the default in human relationships
Adam Smith demonstrated that there can be equal exchange between capitalists with his butcher, baker, brewer example. Capitalism requires exchange. Traders in financial markets for financial gain are capitalists. Capitalists donate to charity. There is no distinction between capitalism and market.
Yanis is clueless and grovels at Martin Wolfs feet.
The natural state of man is one of violent coercion. The peaceful and voluntary exchange of goods and services (capitalism) can only arise when a civilization has evolved to a place where it has stability, security and property rights. Without those 3 things capitalism will be impossible to maintain because your civilization will regress back to the natural, more primitive state of man and violent coercion will return.
Your passage about “abandoning bipedalism” reminds me of this passage from Shirley Jackson’s short story “The Lottery”, where the oldest person in the village, Old Man Warner, challenges those who would get rid of the lottery: "Listening to the young folks, nothing's good enough for them. Next thing you know, they'll be wanting to go back to living in caves, nobody work any more, live hat way for a while. Used to be a saying about 'Lottery in June, corn be heavy soon.' First thing you know, we'd all be eating stewed chickweed and acorns. There's always been a lottery."
Mostly disagree with this analysis. Markets and capitalism are inseparable. That is because markets are competitive. Even in your own examples there is capitalism, you just don't recognize it. You could distinguish between producer markets and consumer markets. But even consumer markets can become competitive when there is a shortage or scarcity. When a farmer produces food he is both the producer and the capitalist. When he sells his surplus to the market that is capitalism. Small businesses are also capitalist. All production for the market is capitalist. There is no distinction between the "MoP" and self-employment. In addition, there are other types of capitalism, such as arbitrage, exploiting market opportunities, capitalizing on asset values, and market power. It gets complicated. As long as you are using capital to extract profits from someone else you are a capitalist period.
'When a farmer produces food he is both the producer and the capitalist. When he sells his surplus to the market that is capitalism.'
This is just a market, though. Farmers have been selling crops for a millennium. Surely you would not consider a farmer in ancient Mesopotamia to be a capitalist.
No, its not "just" a market. Its a capitalist market. Because the farmer is extracting a profit from the market by using his capital. The definition of capitalism is using capital as leverage to extract a profit from the market. That's the best analytical definition of capitalism. Its clearly defined. You may not like it, ok. But to do good analysis you need a succinct definition.
Yes, I would consider an ancient Mesopotamian farmer a capitalist if he is selling to the market for profit. I would also consider slavery as capitalism. Also, European expeditions to steal gold and land. Colonialism also. As long as people/groups are competing for private gain then its capitalism. This is the problem with Marxism. Stage theory is when capitalism became a "political project" and a capitalist ruling class. It has little analytical value.
A child's level of understanding would be to say that profit is extracted from the market; I was under the impression that market exchanges were supposed to be mutually beneficial! Be honest: Have you actually read Marx?
Great essay, Joe. I’d add that it’s always an unexamined assumption when “natural”, whether true or not, is an argument in support of something. Most of the key advancements of humanity were intended to alleviate the effects of nature. Germ theory, hygiene, electrification, transportation, indoor plumbing, telecommunications, all these things were defending us against or helping us in spite of nature’s “intentions”. In a way, capitalism is natural - amoral and darwinistic. Not something to brag about.
Well put, Richard. I've always found the 'natural' line to be odd. There are many 'natural' things humans do that we now recognize as dangerous or immoral. Why would we structure an economic system in that way?
How would you classify the example of Norway's state-owned oil production in terms of socialism vs capitalism, and how does democratic socialism factor in to that classification? Honest question, as I do not know, myself, and want to. Thanks!
Great question! I believe there's no denying Norway's oil industry is socialist. It quite literally is the collective ownership of the means of production. However, I would not consider Norway a strictly 'socialist country.' But that's not to say it's bad. Socialism and capitalism are not something you can turn on or off. They're a spectrum. So while a significant portion of Norway's economy is socialist, there's also a lot of capitalism. IMO, it's better to keep moving towards socialist policies while decreasing capitalist ones.
I'm going to table your question on Democratic Socialism for now, just because I'm on my way out the door and don't want to rush it. I'll answer soon though!
State ownership is not necessarily the "collective ownership of the MoP." Thats because the state is not synonymous with the people. If a Monarchist is the state, like in Saudi Arabia, then the Monarchist owns the oil, not the people. The state is not a collective. The state is collective only when it is purposed to be so.
Socialism would organize and govern Norway's oil and SWF differently.
You're correct state ownership is not inherently collective ownership. But because Norway is a democratic state, and the state controls the oil, it's a socialist mode of production.
No. Norway is an authoritarian technocracy. It is not governed according to any socialist principles. Socialism would use the oil revenue to fund the budget and relieve that tax burden and cost of living for its citizens. It also would directly own those resources rather than them being quangos. It also wouldn't have stock ownership in its SWF. Those resources would also be governed democratically by stakeholders. You are delusional if you think Norway is democratic, even more delusional if you think Norway is socialist. Norway is state capitalist.
Norway's state owned oil is state capitalism. No different than the Saudi's.
Norway is social democracy; a mixed system; inherently contradictory.
I don't know why they just don't have socialism. Why have competing methods and contradictory goals of governance for determining outcomes? Why kiss the asses of the capitalist classes? Why have them at all?
What about the 'spectrum' Joe mentioned? Norway is among the top ten nations in the world for happiest populations, so clearly they're doing something right. Strong social safety net, healthcare and work-life balance have been decimated in this country, the factors to which Norway's happiness rating correlate.
I guess you can view it as a spectrum. I view it as two systems with contradictory goals mashed together. You can make it work, but it doesn’t make any sense. That’s why social democratic parties implemented neoliberal reforms and still doing so incrementally.
I don’t put any stock in happiness. If you polled slaves on the plantation I’m sure some of them would say they were happy.
I spoke with a man yesterday who is pursuing his doctorate in history; he was a government employee, I believe, and was early in the program. I asked about what he was thinking in terms of a dissertation, and he didn't know yet. So we spoke for a while, and I suggested retrieving society from corporate control... He agreed that was pretty much the problem at hand. Being an idealist, I must believe it's possible and know it is essential to any healthy evolution. How the actual fuck is the question? The forces protecting the ruling class seem more powerful than ever, but it MUST be possible. But how?
You are talking about markets, not capitalism. The farmer, selling his surplus is engaging in trade.
Now, when mega corporations own the land, the seed, the equipment, and the farmers are mostly indentured serfs, THAT is capitalism.
And even when the farmer MIGHT own the land, often he is under vast mortgages to banks; depending on what he farms, he needs to buy the gmo seeds, the specific pesticides, the particular type of chicken etc. The agricultural firms decide what will be paid for the surplus-or if he will be paid at all (the egg crises was on purpose.)
Because harvest comes at the end of the season, banks loan money up front; placing the farmer in debt on the hopes that the commodities markets will pay a fair price and that nature cooperates.
Again, this is capitalism. And why there are nearly 0 true family farms left.
This particularly vile form of capitalism is a relatively new invention as new means of exploitation are invented every year.
@PEIOI you come across incredibly disingenuous here. Who are you and why should any readers grant you credibility when a quick glance shows Zero Evidence that you’re not a bot?
Good to distinguish between a market and a mode of production -- you're absolutely correct that the elision of the two erases the possibility of meaningful discourse on the term "capitalism." Regarding the caveman hypothetical, I think it's important to remember that the idea of money-based markets as descendants of direct barter itself is largely mythic. Erald Kolasi wrote this particularly insightful note on that element of the whole natural fallacy: https://substack.com/@technodynamics/note/c-125005177?utm_source=notes-share-action&r=47lytd
That's a fascinating post! I'll admit I held what Kolasi describes as the 'standard version' idea of money. So it's something I'd like to learn more about. Thanks for sharing.
Buddy, you gotta read David Graeber. From what I recall, Kolasi is still overstating the significance of "mutual exchange" here, though I could definitely be wrong: He points out that paying back a social "debt" with something of "lesser value" was considered insulting, but I think "paying back a debt" at all - as in, zeroing out accounts entirely such that all obligations ceased - was also insulting, as it implied that you didn't intend to interact with the other person again. Instead, people would "pay back debts" with a little extra; I owed you, now you owe me, back and forth.
“It’s a dog eat dog world” is such a stupid statement because it isn’t. A dog will only eat another dog if things have gone very badly wrong for both dogs. The reality is that we live in a “dog support dog” or “dog sometimes prioritise the needs of the community ahead of themselves” world. Dogs are pack animals, successful because they cooperate, just like humans.
lol that's a great point
"...it’s that they misunderstand capitalism." Yes, perhaps by design. People say its 'owning the means of production' without understanding the instrument of power, the means of ownership. If you sell something do you think you're a capitalist? People used to have a better understanding of who the capitalists were and a considerable history of trying to change the system.
Capitalism began as a French word, “capitalisme,” used to refer the owners of capital (the money) and their system of war finance, or the practice of borrowing large amounts of money to fund the costs of war.” War debt was in fact how the capitalists got nations to hand over their monetary authority to the wealthy private interests who controlled large accumulations of money. So, capitalism dominates the ownership of the raw materials, the means of production, exploits earth’s resources and labor, concentrates wealth, creates poverty, drives destructive growth, predatory competition and all wars. That is what capitalism does …but what IS capitalism?
What does the word literally mean? I put it this way:
Capitalism = (capital = money) + (ism = system) = money system. The central feature and source of the awesome power of the capitalists is the debt-based private global monetary system they own and operate through the global banking system. Capitalism is often wrongly conflated with “free enterprise” and “free markets” but capitalism ensures that these are NOT free. This is because Capitalism is a debt parasite on the back of free enterprise making every household, business and government in this world in debt and dependent on the banking system. Abuse of the monetary system for personal gain is the definition of usury.
Frederick Soddy wrote that money; in order to be the distributive mechanism for society it must adhere to certain democratic principles. “To allow it (money) to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government.” This is where we are.
That Soddy quote is spot on. I've always seen it as a problem that money is discussed as property first, a currency second. That always seemed like a bad way to lead to money interests superceding the state, and by extension public interests.
It gets better the more ancient history you study. Yeah - currency was a comparatively recent invention, we existed as a species first a hundred thousand years or so before inventing it. So ok, for a period before that in many regions seashells or beads were used as currency but before that… well owning things only really became a big deal after the invention of agriculture, because then you had a whole class of people who would have no food until their crops grew. Prior to that, if you were hungry, you would just go and get some food. The amount of time people spent getting food is believed to have been considerably less than an eight hour working day every day too.
in most cultures, in most places, once agriculture developed, the first stage was something that sounds a lot like communism: the growing would be planned by the state, food would be harvested by the state, stored by the state, and distributed as rations. This happened all over the world. China, Mesopotamia, Egypt, the Inca (albeit they were considerably later, they weren’t the first civilisation in their region) Individual farmers were not receiving salaries and then going to the shops to buy the food if their choice.
One of the defining criteria for the development of civilisation is the emergence of inequality. In prehistoric communities there weren’t really rich people and poor people. Didn’t happen until cities happened, which happened within the last 2-3% of the time Homo sapiens have been on the planet. Before that we were all equal.
Pre-agricultural prehistoric communities have also often been found to include adults with severe disabilities from birth. People who would not have been able to support themselves, and to reach 40, must have been supported by multiple generations, both people older and younger than themselves. The default state for humans is that we carry our weak. Why? How does this work in a Darwinist context? Well: what does it tell the community? It says, we will support each other. It’s an amazingly powerful bonding tool. I can see why evolution would have put that there.
People who say that capitalism is the default state for humans are betraying that they have no knowledge at all about their own history. Even if you use “capitalism” as shorthand for any system of buying and selling (which is technically inaccurate): it’s still a very recent innovation.
Marx said it best: 'Human nature is driven by material conditions.' If you were a hungry hunter-gatherer, you would form a band and go scavenge for food. You certainly wouldn't configure a capitalist mode of production to sell the hours you searched for food as a commodity to earn a wage so you could buy food.
At the family level, people don’t default to competition. No one expects kids to pay rent at age five or pay for healthcare. If capitalism were natural, we’d see market dynamics in families too. We don’t, because cooperation is the default in human relationships
I'm laughing thinking about a market-based family system.
Not to self-promote, but I took on this topic in a post which your readers might find useful: https://hipcrime.substack.com/p/capitalism-has-always-existed
Thanks! Feel free to share anything relevant to the discussion in my chat/comments. Even if you're the one who wrote it.
Adam Smith demonstrated that there can be equal exchange between capitalists with his butcher, baker, brewer example. Capitalism requires exchange. Traders in financial markets for financial gain are capitalists. Capitalists donate to charity. There is no distinction between capitalism and market.
Yanis is clueless and grovels at Martin Wolfs feet.
The natural state of man is one of violent coercion. The peaceful and voluntary exchange of goods and services (capitalism) can only arise when a civilization has evolved to a place where it has stability, security and property rights. Without those 3 things capitalism will be impossible to maintain because your civilization will regress back to the natural, more primitive state of man and violent coercion will return.
Very true. Human's 'natural' state is to kill other tribes and take their food. That's hardly the mindset we want for modern economic organizaiton!
Your passage about “abandoning bipedalism” reminds me of this passage from Shirley Jackson’s short story “The Lottery”, where the oldest person in the village, Old Man Warner, challenges those who would get rid of the lottery: "Listening to the young folks, nothing's good enough for them. Next thing you know, they'll be wanting to go back to living in caves, nobody work any more, live hat way for a while. Used to be a saying about 'Lottery in June, corn be heavy soon.' First thing you know, we'd all be eating stewed chickweed and acorns. There's always been a lottery."
Mostly disagree with this analysis. Markets and capitalism are inseparable. That is because markets are competitive. Even in your own examples there is capitalism, you just don't recognize it. You could distinguish between producer markets and consumer markets. But even consumer markets can become competitive when there is a shortage or scarcity. When a farmer produces food he is both the producer and the capitalist. When he sells his surplus to the market that is capitalism. Small businesses are also capitalist. All production for the market is capitalist. There is no distinction between the "MoP" and self-employment. In addition, there are other types of capitalism, such as arbitrage, exploiting market opportunities, capitalizing on asset values, and market power. It gets complicated. As long as you are using capital to extract profits from someone else you are a capitalist period.
'When a farmer produces food he is both the producer and the capitalist. When he sells his surplus to the market that is capitalism.'
This is just a market, though. Farmers have been selling crops for a millennium. Surely you would not consider a farmer in ancient Mesopotamia to be a capitalist.
No, its not "just" a market. Its a capitalist market. Because the farmer is extracting a profit from the market by using his capital. The definition of capitalism is using capital as leverage to extract a profit from the market. That's the best analytical definition of capitalism. Its clearly defined. You may not like it, ok. But to do good analysis you need a succinct definition.
Yes, I would consider an ancient Mesopotamian farmer a capitalist if he is selling to the market for profit. I would also consider slavery as capitalism. Also, European expeditions to steal gold and land. Colonialism also. As long as people/groups are competing for private gain then its capitalism. This is the problem with Marxism. Stage theory is when capitalism became a "political project" and a capitalist ruling class. It has little analytical value.
A child's level of understanding would be to say that profit is extracted from the market; I was under the impression that market exchanges were supposed to be mutually beneficial! Be honest: Have you actually read Marx?
Great essay, Joe. I’d add that it’s always an unexamined assumption when “natural”, whether true or not, is an argument in support of something. Most of the key advancements of humanity were intended to alleviate the effects of nature. Germ theory, hygiene, electrification, transportation, indoor plumbing, telecommunications, all these things were defending us against or helping us in spite of nature’s “intentions”. In a way, capitalism is natural - amoral and darwinistic. Not something to brag about.
Well put, Richard. I've always found the 'natural' line to be odd. There are many 'natural' things humans do that we now recognize as dangerous or immoral. Why would we structure an economic system in that way?
How would you classify the example of Norway's state-owned oil production in terms of socialism vs capitalism, and how does democratic socialism factor in to that classification? Honest question, as I do not know, myself, and want to. Thanks!
Great question! I believe there's no denying Norway's oil industry is socialist. It quite literally is the collective ownership of the means of production. However, I would not consider Norway a strictly 'socialist country.' But that's not to say it's bad. Socialism and capitalism are not something you can turn on or off. They're a spectrum. So while a significant portion of Norway's economy is socialist, there's also a lot of capitalism. IMO, it's better to keep moving towards socialist policies while decreasing capitalist ones.
I'm going to table your question on Democratic Socialism for now, just because I'm on my way out the door and don't want to rush it. I'll answer soon though!
State ownership is not necessarily the "collective ownership of the MoP." Thats because the state is not synonymous with the people. If a Monarchist is the state, like in Saudi Arabia, then the Monarchist owns the oil, not the people. The state is not a collective. The state is collective only when it is purposed to be so.
Socialism would organize and govern Norway's oil and SWF differently.
You're correct state ownership is not inherently collective ownership. But because Norway is a democratic state, and the state controls the oil, it's a socialist mode of production.
No. Norway is an authoritarian technocracy. It is not governed according to any socialist principles. Socialism would use the oil revenue to fund the budget and relieve that tax burden and cost of living for its citizens. It also would directly own those resources rather than them being quangos. It also wouldn't have stock ownership in its SWF. Those resources would also be governed democratically by stakeholders. You are delusional if you think Norway is democratic, even more delusional if you think Norway is socialist. Norway is state capitalist.
See my latest post on what socialism is.
Norway's state owned oil is state capitalism. No different than the Saudi's.
Norway is social democracy; a mixed system; inherently contradictory.
I don't know why they just don't have socialism. Why have competing methods and contradictory goals of governance for determining outcomes? Why kiss the asses of the capitalist classes? Why have them at all?
What about the 'spectrum' Joe mentioned? Norway is among the top ten nations in the world for happiest populations, so clearly they're doing something right. Strong social safety net, healthcare and work-life balance have been decimated in this country, the factors to which Norway's happiness rating correlate.
I guess you can view it as a spectrum. I view it as two systems with contradictory goals mashed together. You can make it work, but it doesn’t make any sense. That’s why social democratic parties implemented neoliberal reforms and still doing so incrementally.
I don’t put any stock in happiness. If you polled slaves on the plantation I’m sure some of them would say they were happy.
I spoke with a man yesterday who is pursuing his doctorate in history; he was a government employee, I believe, and was early in the program. I asked about what he was thinking in terms of a dissertation, and he didn't know yet. So we spoke for a while, and I suggested retrieving society from corporate control... He agreed that was pretty much the problem at hand. Being an idealist, I must believe it's possible and know it is essential to any healthy evolution. How the actual fuck is the question? The forces protecting the ruling class seem more powerful than ever, but it MUST be possible. But how?
You are talking about markets, not capitalism. The farmer, selling his surplus is engaging in trade.
Now, when mega corporations own the land, the seed, the equipment, and the farmers are mostly indentured serfs, THAT is capitalism.
And even when the farmer MIGHT own the land, often he is under vast mortgages to banks; depending on what he farms, he needs to buy the gmo seeds, the specific pesticides, the particular type of chicken etc. The agricultural firms decide what will be paid for the surplus-or if he will be paid at all (the egg crises was on purpose.)
Because harvest comes at the end of the season, banks loan money up front; placing the farmer in debt on the hopes that the commodities markets will pay a fair price and that nature cooperates.
Again, this is capitalism. And why there are nearly 0 true family farms left.
This particularly vile form of capitalism is a relatively new invention as new means of exploitation are invented every year.
@PEIOI you come across incredibly disingenuous here. Who are you and why should any readers grant you credibility when a quick glance shows Zero Evidence that you’re not a bot?