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infinite thought
07-12-2005, 11:46 PM
Mark is right, as usual. All this recent discussion of <a href="http://k-punk.abstractdynamics.org/archives/006989.html">'populism' and related matters</a> needs thrashing out in a public place that lacks a proper (if usually pseudonymous) header...

so, capitalism, then: 'An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.'

AND/OR

the thing that has killed, maimed, limited, been tied up with wars, conspiracy and devastation since AGES

So?

martin
08-12-2005, 12:04 AM
I'd venture (perhaps wrongly) that 18th century is a bit late on- I thought it was born out of the Crusades?

infinite thought
08-12-2005, 12:17 AM
yeah, hence '(at least)'....anyway, not the point! already argued with someone about this. Let's say 16thC, according to Ellen Wood, Marx, or 1770s, industrial-like....or...

It's controversial....15th century Venice is a contender....

Anyway, whatever, what does it mean now is point...

k-punk
08-12-2005, 12:19 AM
Hurray! (for the thread)

I can't get too far into this atm (work in the a.m. and its already late) but:

surely Martin's right, the 18C is too late. Isn't 1750 thought of as the approx date for the arrival of INDUSTRIAL capitalism; I think Braudel, for example, dates back earlier phases of capitalism to about 1500.

the 'free market' thing is also misleading. John Gray is very good, isn't he, on the ways in which what 'free markets' there have been in capitalism were artificially created by state controls.

infinite thought
08-12-2005, 12:30 AM
no such thing as a free market, indeed. Even laissez-faire folk can't help meddling.

martin
08-12-2005, 12:56 AM
Right, say I press up 500 DVDs and sell them, purely by hand and word of mouth, and make a profit on shifting the lot, all on my own. The contents of these DVDs contravene several state-enforced laws. I semi-financed their production with money from social security payments. Assuming I now want to repeat this operation, but perhaps on a larger scale, can I accurately be described as a capitalist?

Rebis
08-12-2005, 01:40 AM
According to Giovanni Arrighi, who I am reading now and who pretty much follows Braudel, the "systematic accumulation of capital" dates back to merchants in Italian city-states (Venice, Florence, Genoa) of the 15th & 16th centuries.

bat020
08-12-2005, 01:04 PM
Commodity exchange and systematic accumulation of capital go back donkeys years – the crucial point is when capitalists take over the means of production, ie break out of their confinement to supplementary "mercantile" roles such as distributors and/or financiers. That's when capitalism as such is instituted.

Re the pesky details of dates and places, Chris Harman's recent article The Rise of Capitalism (http://www.isj.org.uk/index.php4?id=21&issue=102) provides a solid historical overview.

john eden
08-12-2005, 01:15 PM
Right, say I press up 500 DVDs and sell them, purely by hand and word of mouth, and make a profit on shifting the lot, all on my own. The contents of these DVDs contravene several state-enforced laws. I semi-financed their production with money from social security payments. Assuming I now want to repeat this operation, but perhaps on a larger scale, can I accurately be described as a capitalist?

Most of this is irrelevant, surely - the means of distribution, the contents of the DVD, the origins of your capital.

If you produce something which you sell at a profit then you're petit bourgeois, I think? :confused: [edit - or a merchant/mercantile as Bat says]

If you buy your own specialised DVD duplication machine and/or employ staff then I would say you were a capitalist.

Grievous Angel
08-12-2005, 01:24 PM
That Chris Harman article is pretty good.

I'm not sure that employing people necessarily makes you an exploitative "capitalist" in the classical sense. (But then, I'm not a Marxist -- oh, sorry, forgot, Thought & Politics are Marxist-only enclaves :p )

bat020
08-12-2005, 01:31 PM
Making a living by flogging stuff that's a product of your own labour is "artisanal" production, if I recall correctly. Used to be loadsa them in the middle ages, but they get squeezed out by big capital in the long run.

Employing staff does mean that you're exploiting their labour, I'm afraid. Unless you hand over all your profits to them – which might piss off your investors somewhat.

jasonh
08-12-2005, 04:55 PM
It's an interesting point, as how can you see out of the system you are in to get the perspective required (unless we are already post-capitalist, as some would posit).

The feudal/capitalist switch is very difficult to unpick. If you look at it politically, you could see Magna Carta as a starting point in England as monarchial power was bartered to the rising baronial class - the final nail in this coffin being the Bill of Rights C1680 (can't remember the date). Enshrining the right of parliament (mainly burghers, proto-capitalists etc to run the country as they do now).

Economically...I'm not an expert. C1750 seems fine from a mechanisation perspective, but its a chicken and egg argument about the culture already being there without the technology.

borderpolice
09-12-2005, 10:09 AM
Employing staff does mean that you're exploiting their labour, I'm afraid. Unless you hand over all your profits to them – which might piss off your investors somewhat.

Accepting (i.e. risking) investments does mean that you're exploiting investors' labour, I'm afraid. Unless you hand over all your profits to them – which might piss off your workers somewhat.

borderpolice
09-12-2005, 10:20 AM
I'm not sure that employing people necessarily makes you an exploitative "capitalist" in the classical sense. (But then, I'm not a Marxist -- oh, sorry, forgot, Thought & Politics are Marxist-only enclaves :p )

the marxists understanding of exploitation rests on marx rendition of what is called the
"labour theory of value" LToV. that theory is explained in the first volume of "Kapital".
everything in that book and much of socialist thought rests of the LToV, although
that isn't usually understood. unfortunatly, LToV is bullshit, as one can easily see, and
as has been pointed out many times by working economists and others, although, to
be sure, the amount of labour, measured in crude temporal units, is an important factor
in value creation, just not the only one. in many financial transactions it is a relativly
irrelevant factor.

without the LToV, the socialist conception of exploitation is in ruins. this doesn't mean
exploitation is a meaningless concept, just that it's most prominent theoretical redition is
BS.

john eden
09-12-2005, 10:41 AM
unfortunatly, LToV is bullshit, as one can easily see, and
as has been pointed out many times by working economists and others

come on then, let's 'ave it! :D

bat020
09-12-2005, 10:53 AM
Accepting (i.e. risking) investments does mean that you're exploiting investors' labour

No, because investors do not work.

borderpolice
09-12-2005, 11:02 AM
No, because investors do not work.

rubbish. (1) investors risk loosing their investments, and often do. the
question of work/no work is not the only evaluation criterion of
fair pay. degrees of risk are another cruicial party. (2) the investors
have to get their money from somewhere. in the mosts cases in
contemporary investment, the invested money
is the saved health and pension insurance of the masses.
[of course there are investors who do not work, for example those
who inherit their wealth, or those who discover oil in their back yard,
but this hardly accounts for all investment.]

So by saying, investors should not be compensated for risking their
investments, you are saying the working class has no right for their
pension and health care savings to be fairly treated. By saying investors
do not work, you are saying that the working class does not work.

interesting POV.

As an aside, the stupid fiction that investors do not work, are pure
exploiters, is a cruical and prominent part of nazi ideology.

Grievous Angel
09-12-2005, 11:10 AM
I am by no means an expert on this but I have read on zmag and elsewhere that at least some reasonably hardcore leftists who take an interest in economics feel that the LTOV doesn't stack up. In other words I think there's some dialectical progression happening within Marxism...

bat020
09-12-2005, 11:48 AM
(1) investors risk losing their investments, and often do.

True but irrelevant. "Risking a loss" isn't working – it's gambling.


the investors have to get their money from somewhere.

True but irrelevant. All this shows is that investors may have worked in the past. But they do not work for moneys they receive from investing (interest, dividends, rent etc) – ie investors qua investors do not work.


the stupid fiction that investors do not work, are pure exploiters, is a crucial and prominent part of nazi ideology.

No, Nazi ideology distinguishes between industrial and finance capital, venerating the former while vilifying the latter. Finance capital (banking, moneylending etc) is thereby made a scapegoat for capitalism in general, which opens the door to all the standard racist tropes of Jew-as-parasite. But that is quite different from the Marxist position, which views all capitalist investment as exploitative.

k-punk
09-12-2005, 12:14 PM
So by saying, investors should not be compensated for risking their
investments, you are saying the working class has no right for their
pension and health care savings to be fairly treated. By saying investors
do not work, you are saying that the working class does not work.

interesting POV.

There's a difference between saving and investing. Investors don't expect their investments to be 'fairly treated', they, self-evidently, want to make a profit from them.


As an aside, the stupid fiction that investors do not work, are pure
exploiters, is a cruical and prominent part of nazi ideology.

Comparison to Nazis, so early in the thread? Well done...

As for Labour Theory of Value, it is not at all clear that Marx endorsed it. As it happens, I'm reading a book at the moment - Karatani's Transcritique - which holds that it was early socialist economists like Ricardo who believed in the LTOV, and that everything that was interesting in Marx came out of a critique of that view.

borderpolice
09-12-2005, 12:17 PM
True but irrelevant. "Risking a loss" isn't working – it's gambling.

True but irrelevant. All this shows is that investors may have worked in the past. But they
do not work for moneys they receive from investing (interest, dividends, rent etc) – ie investors qua investors do not work.

confused! if somebody has worked in the past, what should they do with
the money, consume anything on the spot? is that even possible? all work is done
for future benefit. even the mytholkogical totally unexploited worker who gets the fair
share of his toil, when he buys a piece of bread does so with money he acquired in
the past. any future orientated behaviour is gambling in this sense. it is in other
words impossible not do "speculate", "invest" or, and this is the same thing, "gamble".

As an aside: you only refer to the money investors make. what about the money they
loose? if the investor looses his money through investing (default, stock market crash
etc) then what? he presumable just prints new money for investing?

as a further aside, how do you square the claim of worker exploitation with the fact that
most invested money, through pension and insurance schemes is actually the workers?
they exploit themselves then?




No, Nazi ideology distinguishes between industrial and ", venerating the former while vilifying the latter. Finance capital (banking, moneylending etc) is thereby made a scapegoat for capitalism in general, which opens the door to all the standard racist tropes of Jew-as-parasite. But that is quite different from the Marxist position, which views all capitalist investment as exploitative.

the most commonly used distinction in this context was between "schaffendes
kapital" (i.e. those who work and create) and "raffendes Kapital" (i.e. those who live of interest, exploit others, consume).

you should read your own posts! you explicitly criticise "finance capital" only, through
repeated reference to mythological "investors" who "do not work for moneys they receive
from investing (interest, dividends, rent etc) ". You didnt criticise "industrial capital"
in your posts. Nothing in your posts here is about anything other than finance capital.

borderpolice
09-12-2005, 12:25 PM
There's a difference between saving and investing. Investors don't expect their investments to be 'fairly treated', they, self-evidently, want to make a profit from them.


oh really? tell me more. there is no substantial difference between saving and investing.
the terms denote different <I>perceived</I> risk-taking profiles. and of course investors expect
to be treaded fairly. the interesting question is: what does it mean to be fair to somebodies
risk taking profile, given that it is by definition about an unknown future.



Comparison to Nazis, so early in the thread? Well done...


it's always fun to point out ideological similarities ...


As for Labour Theory of Value, it is not at all clear that Marx endorsed it. As it happens, I'm reading a book at the moment - Karatani's Transcritique - which holds that it was early socialist economists like Ricardo who believed in the LTOV, and that everything that was interesting in Marx came out of a critique of that view.

The LToV was the dominant account of value at the time and Marx grappled with it, yes.
what;s interesting in marx is that he coupled it with hegelian social constructivism and
historicism. This was the first comprehensive social theory that also included the economy
[to be fair, Hegel himself had written much about it, but the relevant manuscrips are lost].

john eden
09-12-2005, 12:32 PM
the most commonly used nazi distinction was between "schaffendes kapital" (i.e. those
who work) and "raffendes Kapital" (i.e. those who live of interest, exploit others).
you should read your own posts! you explicitly criticise "finance capital" only, through
repeated reference to mythological "investors" who "do not work for moneys they receive
from investing (interest, dividends, rent etc) ". You didnt criticise "industrial capital"
in your posts. Nothing in your posts here is about anything other than finance capital.

Who is it that directly exploits the workers in the LToV? It's the bosses, i.e. industrial capital. This discussion about investors is additional to, and related to, that relationship.

borderpolice
09-12-2005, 12:45 PM
Who is it that directly exploits the workers in the LToV? It's the bosses, i.e. industrial capital. This discussion about investors is additional to, and related to, that relationship.

you are now introducing an ad-hoc auxiliary distinction between "direct" and "indirect" exploitation. what could that refer to?

anyway. the term "boss" is insufficiently precise in any earnest discussion. "industrial capital" refers to the owners of the means of production and was distinguished from other forms of capital like land, or money. this may have made sense in early industrial development, where
a factory owner could have operated fairly autonomously. given the dependency on modern
production an a steady flow of credit, this is no longer a workable distinction.

john eden
09-12-2005, 12:48 PM
you are now introducing an ad-hoc auxiliary distinction between "direct" and "indirect" exploitation. what could that refer to?

anyway. the term "boss" is insufficiently precise in any earnest discussion. "industrial capital" refers to the owners of the means of production and was distinguished from other forms of capital like land, or money. this may have made sense in early industrial development, where
a factory owner could have operated fairly autonomously. given the dependency on modern
production an a steady flow of credit, this is no longer a workable distinction.

My point is that, as a worker, you are more likely to come in to contact with "bosses" than, shall we say "shareholders". That has been my experience anyway.
I am sorry if you find these terms imprecise, I am not an economist.

Jezmi
09-12-2005, 01:02 PM
I think respinsibility is an underrated aspect of the discussion between capitalism and socialism.
A business owner/investor holds all the cards in his/her own hands, and will rise and fall by his/her tactics.
A worker expects a good job to provide security, while they could be fired any day! But giving responibility to another party does give peace of mind. That is the main reason why workers don't become investors/business owners, the trade-off doesn't seem worth it (whilest really it is).
Ofcourse a big difference between nowadays and the time of Marx, is that capitalism has evolved to a point where most people can build up a business. Education and credit are available.

johneffay
09-12-2005, 01:07 PM
without the LToV, the socialist conception of exploitation is in ruins. this doesn't mean exploitation is a meaningless concept, just that it's most prominent theoretical redition is
BS.
I'm not at all sure that all socialist conceptions of exploitation do depend upon the LToV, but we'll let that pass. What I would like to know is which conceptions of exploitation you do find meaningful, and what you think can be done about them (if you think anything should be). I'm getting a lot of hostility towards a general leftist position (not all of which I disagree with), but I would be much more interested in hearing your take on the original question.

borderpolice
09-12-2005, 01:20 PM
Ofcourse a big difference between nowadays and the time of Marx, is that capitalism has evolved to a point where most people can build up a business. Education and credit are available.

you make the same mistake that socialist usually make. you take your local society as
all of society. you take national borders as society borders. however, we are living in a totally globalised world. there is only one society, world society. in this world society there are clearly may totally excluded, maybe even the majority of the world population. most of those do not benefit from the benefits of ordo-capitalism with formal democracy and functional differentiation between the legal, economic, political, educational etc systems, things we in the west take for granted.

Jezmi
09-12-2005, 01:28 PM
you make the same mistake that socialist usually make. you take your local society as
all of society. you take national borders as society borders. however, we are living in a totally globalised world. there is only one society, world society. in this world society there are clearly may totally excluded, maybe even the majority of the world population. most of those do not benefit from the benefits of ordo-capitalism with formal democracy and functional differentiation between the legal, economic, political, educational etc systems, things we in the west take for granted.

Fair enough (funny that i sound like a socialist, i consider myself anything but that)
But a big reason why third world countries is because of processes that are not part of capitalism, like farm subsidies -- we're keeping a unnatural way of farming in business and keeping farmers from third world countries from developing.
These are not processes of capitalism -- which would call for free-market.

borderpolice
09-12-2005, 01:33 PM
I'm not at all sure that all socialist conceptions of exploitation do depend upon the LToV, but we'll let that pass. What I would like to know is which conceptions of exploitation you do find meaningful, and what you think can be done about them (if you think anything should be). I'm getting a lot of hostility towards a general leftist position (not all of which I disagree with), but I would be much more interested in hearing your take on the original question.

I'm not sure what the original question is. i have no substantial theory of exploitation,
just a keen appreciation that older theories on that matter are deeply problematic. here
are a couple of points if find worthwhile: (1) economic fairness cannot be tied to worked
time units. risk taking needs to be accounted for. (2) exploitation cannot be explained in
economic terms. ownership patterns are effects not causes of social organisation. (3)
exploitation in an intuitive sense (i.e. that which is to be explained) seems worse in the
third world, and correlates strongly with <B>lack of functional differentiation</B>, i.e.
lack of division between politics, economy, the legal and educational systems and so forth.
one of the key effects of functional differentiation is to restrain power accumulation.
e.g straightforward buying onself into government, buying judges and the like.

Jezmi
09-12-2005, 01:38 PM
<B>lack of functional differentiation</B>, i.e.
lack of division between politics, economy, the legal and educational systems and so forth.
one of the key effects of functional differentiation is to restrain power accumulation.
e.g straightforward buying onself into government, buying judges and the like.

Wasn't this the main downfall of all communist states?
Just an interesting side note...

k-punk
09-12-2005, 02:05 PM
oh really? tell me more. there is no substantial difference between saving and investing.
the terms denote different <I>perceived</I> risk-taking profiles. and of course investors expect
to be treaded fairly. the interesting question is: what does it mean to be fair to somebodies
risk taking profile, given that it is by definition about an unknown future.

Investors expect to make money from their money; I can't see what's 'fair' about that (any more than it is 'fair' for someone who bets on a horse race to expect to make dividends on that). Savers expect their money to be looked after. I agree that, because of interest etc, many savers are also investors. But the one doesn't entail the other.

It's not a case of 'a fair day's pay for a fair day's risk' surely. Risk is by its nature aleatory and destructive of the whole concept of fairness.


it's always fun to point out ideological similarities ...

especially when it makes you fall foul of Godwin's Law (http://en.wikipedia.org/wiki/Godwin's_law).


The LToV was the dominant account of value at the time and Marx grappled with it, yes.
what;s interesting in marx is that he coupled it with hegelian social constructivism and
historicism. This was the first comprehensive social theory that also included the economy
[to be fair, Hegel himself had written much about it, but the relevant manuscrips are lost].

What does 'grappled' mean? If grappled means modified or opposed then your original claim - that all leftist economic models depend on the LTOV - would have to be abandoned.

Karatani argues that Marx held what he called a 'transcritical' stance BETWEEN the LTOV as propounded by Ricardo and the theory that value was purely structural/relational as proposed by Bailey. Steven Shaviro has a good discussion of the Karatani book here (http://www.shaviro.com/Blog/?p=457)

Karatani gives a synopsis of his own book here (http://www.clas.ufl.edu/users/jmurphy/Karatani01file/Transcritique.html)

But I agree with John, it would be good to get back to the original question, 'what is capitalism?' (with the implicit sub-question, 'and why does it have an intrinsic relationship to exploitation?') I shd have thought that it isn't making money that is unique to capitalism but making money out of money.

DigitalDjigit
09-12-2005, 02:27 PM
A business owner/investor holds all the cards in his/her own hands, and will rise and fall by his/her tactics.
A worker expects a good job to provide security, while they could be fired any day! But giving responibility to another party does give peace of mind. That is the main reason why workers don't become investors/business owners, the trade-off doesn't seem worth it (whilest really it is).


Prior to the industrial revolution most people worked for themselves and assumed whatever risks there are without relying on anyone to give them a job. It was only after factories were built that the notion of a "job" even began to be adopted. A lot of people were forced to abandon their livelihood and herded into the factories, other couldn't survive on their own because of competition from the factories and had to move to the cities and get a job. Let's not forget the fencing off of the commons which again increased the labor pool available to the factories.

Omaar
09-12-2005, 02:27 PM
Investors expect to make money from their money; I can't see what's 'fair' about that (any more than it is 'fair' for someone who bets on a horse race to expect to make dividends on that). Savers expect their money to be looked after. I agree that, because of interest etc, many savers are also investors. But the one doesn't entail the other.

It's not a case of 'a fair day's pay for a fair day's risk' surely. Risk is by its nature aleatory and destructive of the whole concept of fairness.

Quite. This must be fundamental to a definition of capitalism - making capital simply from owning capital, rather than engaging in any, er ... , 'honest' labour.

I think we should develop an analysis of capitalism based on the observation that many professional investors are basically selfish greedy bastards and uses this data to develop a more concrete analysis of how capital works.

DigitalDjigit
09-12-2005, 02:32 PM
What about looking at interest as an insurance premium. If there was no interest then after one bad investment the capital would be gone and there would be none left to lend. Interest can offset these future potential losses.

I think the concept of lending is very important. What is going on when one lends someone money. It's only abstract pieces of paper how can they be translated into real goods/services. How can such physical temporally-tied entities be saved and passed on into the future.

bat020
09-12-2005, 03:17 PM
all work is done for future benefit. even the mythological totally unexploited worker who gets the fair share of his toil, when he buys a piece of bread does so with money he acquired in the past. any future orientated behaviour is gambling in this sense. it is in other words impossible not to "speculate", "invest" or, and this is the same thing, "gamble".

Even if this were the case, all it would show is that workers take risks too – though with their labour power rather than their capital, and because they are forced to rather than choosing to. It does not demonstrate that, say, the shareholders in a company who "earn" dividends are in any meaningful sense "working" for that money.

In fact you haven't offered any positive arguments for your contention that investors work for their money, just moralistic spluttering at my assertion to the contrary.


you only refer to the money investors make. what about the money they lose? if the investor loses his money through investing (default, stock market crash etc) then what?

What is there to say? For what it's worth, I don't consider investors who lose money as somehow being justly punished for their idleness, any more than I consider investors who win as being justly rewarded for their "efforts" or "entrepreneurship".


how do you square the claim of worker exploitation with the fact that most invested money, through pension and insurance schemes is actually the workers?

Pensions are deferred wages. The capitalist hangs on to them to invest (and the workers have no control over this investment process) then pays them later (or not, witness the string of collapsed occupational pension schemes recently). In the meantime they cream off profits. It simply isn't true that the money all goes back to workers eventually – % of GDP shelled out in wages and pensions has been dropping for the past two decades. The money leaks, and finds its way into the hands of the bourgeoisie.


you explicitly criticise "finance capital" only, through repeated reference to mythological "investors" who "do not work for moneys they receive from investing (interest, dividends, rent etc) ". You didn't criticise "industrial capital" in your posts.

No, I'm not distinguishing between those who invest in financial instruments or "directly" in plant, land, buildings etc – industrial and finance capital are both equally abstract, and neither constitutes working for a living. This is in sharp contrast to the Nazi ideology that cosied up to big industrialists while denouncing "Jewish finance" as "parasitic".

borderpolice
09-12-2005, 04:37 PM
Savers expect their money to be looked after. I agree that, because of interest etc, many savers are also investors.

all savers are investors. all pensioners reap the benefits of their investments.
that's a cruical and often overlooked fact.


It's not a case of 'a fair day's pay for a fair day's risk' surely. Risk is by its nature aleatory and destructive of the whole concept of fairness.

(1) non-predicatbility of the future, which is what risk is a socially constructed simplification of,
is a fact of life and all we can do is deal with it, try and distribute it, fairly.
what's not so clear is what a fair distribution of risk could be and how to do it.

(2) More sophisticated analyses of risk are possible than just saying "aleatoric nature".
some things are riskier than others. prima facie it is not unreasonable to say that certain
types of risk taking behaviour should be more highly rewarded than others.

(3) fairness is not the only important criteria for evaluating questions of dealing with
the distribution of scarcity.

DigitalDjigit
09-12-2005, 04:58 PM
all savers are investors. all pensioners reap the benefits of their investments.
that's a cruical and often overlooked fact.

In modern economies, yes. Even if you put your money in the bank, the bank makes loans using your deposits.

But what about people who put their money under the matress. In what sense are they investors?

borderpolice
09-12-2005, 05:16 PM
Even if this were the case, all it would show is that workers take risks too – though with their labour power rather than their capital, and because they are forced to rather than choosing to.

Of course workers are risk takers, too. That's unavoidable. Everone is forced to be a risk taker. if you want to say something sensible along those lines, it would be that the wealthier you are the more variety you have in your risk taking profiles.



It does not demonstrate that, say, the shareholders in a company who "earn" dividends are in any meaningful sense "working" for that money.

In fact you haven't offered any positive arguments for your contention that investors work for their money, just moralistic spluttering at my assertion to the contrary.

Part of the problem is that we have reached the point of semantics. I can give a definition
of "work", "money" and the like which makes the investor invests part of his wages
to have earned the dividends. then y ou will say, but no, that's not what these phrases mean and so on.

OK, let;s try anyway:

(1) Money is a social medium of exchange. More specifically, It is used to
motivate human behaviour. It is a means of social behaviour instructions
among strangers etc

(2) That's the only point of money. Hence, and in the tradition of "meaning is use",
i identify money with it's effects.

(3) the effects of investing are either Profit or Loss. Hence, by substitution of equals
for equals, if i work for my money and i buy X with my money, I worked for X.
If i invest and win, i worked for my win.


For what it's worth, I don't consider investors who lose money as somehow being justly punished for their idleness, any more than I consider investors who win as being justly rewarded for their "efforts" or "entrepreneurship".

that's good to hear.


Pensions are deferred wages.

No. pensions are a(n obfuscated and enforced) 'contract' between the old and the young, forcing the latter to dedicate a substantial of their working time to toil for the benefit of
the former, and on a society-wide basis, i.e. not just for their parents.


(and the workers have no control over this investment process)

That;s false. Apart from state-mandated pension funds, the worker is entierely free to
save and invest as he feels like it.


then pays them later (or not, witness the string of collapsed occupational pension schemes recently).

and that demonstrates my point, that every form of saving is a form of gambling. and
since you probably disapprove of these collapses, you implicitly admit that risktaking
should itself be fair, for otherwise, why would it be problematic that pension funds sometimes collapse.


It simply isn't true that the money all goes back to workers eventually – % of GDP shelled out in wages and pensions has been dropping for the past two decades.

That's true. But so what? If you want the same money you put in there's a simple solution:
collect the coins under your bed. if you invest you enter a lottery. anyway, what you
are really saing is this: young people these days don't work as much per pensioner
as the pensioners expected, based on the latter;s working efforts for the pensioners of their time. that is likely true. but so what? why do
you expect the pensioners to get, to put it crudly "the money go back" in that way? the intergeneratonal contract of which "money back" or "deferred wages" is simply a crudly
fictional account, assumes for stability that the population is constant. in the west that assumption has failed quite dramatically. if you want "the workers" to 'get back what they put in", the children have to put in massivly more work. someone is going to get fucked over either the young or the old.

fortunatly, the problem is alleviated by technological progress.

borderpolice
09-12-2005, 05:17 PM
In modern economies, yes. Even if you put your money in the bank, the bank makes loans using your deposits.

But what about people who put their money under the matress. In what sense are they investors?

it's a limit case. you still gamble on your currency being stable, burglars not robbing it and so on. if you don't wanna call it investing, then so be it. empirically, that behaviour is marginal.

owen
11-12-2005, 03:26 PM
I'm having trouble with the assertion (actually made on the ethics thread, but anyway) that you can separate 'developing' countries and 'capitalist' countries, as if the exploitation of the former by the latter isn't an utterly inextricable part of capitalism, and has been for the past 400 years- surely this exploitation was concommitant with capital's rise from the very start.
and if there is a truth of capitalism, surely it lies in the production in chinese factories, the wars over diamond reserves in congo, in famine in niger up the road from cash crops and so forth- this is what it means for the majority of people in the world -and as borderpolice points out (in one of his rare points that isn't an aggressive non-sequiteur), it is nothing if not a world system, a total system without an 'outside'-- so talking about it in terms of the prosperity it provides in a few places is something of a smokescreen, no?

k-punk
11-12-2005, 03:34 PM
Right, good, can we stay back on track and avoiding letting this become an ideological battle with BP.... can we specify what it is that makes that relationship of exploitation inevitable and necessary rather than merely contingent?

Wrong
11-12-2005, 07:24 PM
Right, good, can we stay back on track and avoiding letting this become an ideological battle with BP.... can we specify what it is that makes that relationship of exploitation inevitable and necessary rather than merely contingent?

One possibility, which I think is worth looking at, is that the wealth that Europe extracted from the New World is one of the things which allowed the transition from feudalism to capitalism. Marx talks about this a little in the Grundrisse, particulalry how the increased availability of gold allowed for the development of money as such, rather than as a simple proxy for barter.

This leads on to a more conceptual question which I'm not sure I know the answer to in detail, which is the relation between the existence of exchange value (and hence the commodity form), and a particular sort of surplus. On the one hand, there is always surplus value in class societies (the extraction of surplus is what makes them class societies); but maybe the fact that there is so much more surplus in capitalism is what allows the surplus to, as it were, take on a life of its own as capital, rather than simply being directly appropriated by the nobility, as happened under feudalism. I'm not sure I see why that increase in quantity would lead to a change in quality, though.

johneffay
11-12-2005, 08:45 PM
I'm having trouble with the assertion (actually made on the ethics thread, but anyway) that you can separate 'developing' countries and 'capitalist' countries, as if the exploitation of the former by the latter isn't an utterly inextricable part of capitalism,
Surely that's why you can separate them though? If the economies of certain countries are bouyed up by the exploitation of others, then one can point to a difference between the exploiters and the exploited, even if such exploitation is integral to capitalism (which I think you're right about).

it is nothing if not a world system, a total system without an 'outside'-- so talking about it in terms of the prosperity it provides in a few places is something of a smokescreen, no?
I'm very dubious about this. I think that there is a difference between talking about integrated world capitalism, and claiming that there can be nothing outside of the global capitalist network. It's only a short step from there to 'you can't buck the market' ;)

k-punk
11-12-2005, 11:59 PM
One possibility, which I think is worth looking at, is that the wealth that Europe extracted from the New World is one of the things which allowed the transition from feudalism to capitalism. Marx talks about this a little in the Grundrisse, particulalry how the increased availability of gold allowed for the development of money as such, rather than as a simple proxy for barter.

This leads on to a more conceptual question which I'm not sure I know the answer to in detail, which is the relation between the existence of exchange value (and hence the commodity form), and a particular sort of surplus. On the one hand, there is always surplus value in class societies (the extraction of surplus is what makes them class societies); but maybe the fact that there is so much more surplus in capitalism is what allows the surplus to, as it were, take on a life of its own as capital, rather than simply being directly appropriated by the nobility, as happened under feudalism. I'm not sure I see why that increase in quantity would lead to a change in quality, though.

Isn't part of the answer to this the fact that, in capitalism, the worker's labour is his/her commodity? In feudalism, it is the product of labour that is expropriated by the lord. And this expropriated wealth is either consumed in sumptuary pleasure, or else expended on warfare etc - it isn't used to produce more wealth. Whereas in capitalism, surplus arises from the difference between the value of two commodities, i.e. labour and the product of that labour. Note that this isn't to endorse the idea that value is reducible to labour; on the contrary, it is to suggest that value arises from the difference between labour-as-commodity and product-as-commodity.

k-punk
12-12-2005, 12:01 AM
Surely that's why you can separate them though? If the economies of certain countries are bouyed up by the exploitation of others, then one can point to a difference between the exploiters and the exploited, even if such exploitation is integral to capitalism (which I think you're right about).

I'm very dubious about this. I think that there is a difference between talking about integrated world capitalism, and claiming that there can be nothing outside of the global capitalist network. It's only a short step from there to 'you can't buck the market' ;)

Yes, but surely countries that are being exploited by First World countries are, far from being outside the capitalist system, integral to it. They are different from countries like Cuba or North Korea, surely, which could much more convincingly be positioned outside capitalism.

MBM
12-12-2005, 07:14 AM
So the key to capitalism is: what is owned and who does the owning.

- The capitalist is a private individual. Not a state or monarch.
- They own part or all of a business. This ownership includes a right in how the business operates and a share of the profits.
- These businesses provide goods or services in markets in exchange for money (revenue).
- That business employs workers to do the work (frequently but not necesarily). Paying these workers is a source of cost.
- The difference between the revenues & the costs of the business is the profit.

Q. Now why is this bad?
A. The owners of business exploit the workers.
N.B. There are plenty of businesses where the owner & the worker is the same person. These sole traders make up about 14% of the UK workforce
http://www.statistics.gov.uk/StatBase/xsdataset.asp?More=Y&vlnk=4279&All=Y&B2.x=72&B2.y=15
I once had a discussion with an SWP member where he stated that these people were exploiting themselves.

So what do we mean by exploit?

The capitalist makes a profit - i.e. the workers do not get the full total of their labour. The capitalist who does not labour gets something for nothing. Which is unfair. But how do we measure fairness? To what extent to employees of large firms exploit each other: "I work twice as hard as Smith but only get the same pay" N.B. This is not just true of private sector organisations but public sector organisations too. Most of the recent inequality scandals have centred around executive pay - and execs are not "capitalists" in the trad sense of the word - they are managers (who may own some stock in the company but derive income from wage packets rather than stock dividends - altho the vogue for gratuitous stock options does muddy the water).

The picture of "capitalists" and "workers" in the discussion so far has been quite a 19th century one. The factory workers, covered in grime, toil for 14 hours a day whilst the fat "owner" smokes a cigar & fiddles with his pocket watch. Or even a developing world one - where sweat shop labours also toil long hours for minimal pay.

And what about the worker who owns stock in her company - are they worker or capitalist?

Who are these capitalists? Well, in the UK: 1. Foreigners, 2. Insurance Companies & 3. Pension Funds.
http://www.statistics.gov.uk/CCI/nugget.asp?ID=107&Pos=1&ColRank=2&Rank=960

So if you have money in a pension fund - then you are a capitalist.

I would suggest that the arguments against capitalism are less against capitalism as a specific institution and more against: 1. Injustice at a global or local level and 2. Against a culture that values gaining personal wealth above all other attributes. Which is not to say that capitalism is not complicit in both of these things (esp. the latter) but that it is not identical to them.

Or to put it another way:

What about socialism/communism/anarchism/feudalism (delete as appropriate) prevents it from being exploitative or obsessively focused on one aspect of life at the expense of all others?

borderpolice
12-12-2005, 10:14 AM
I'm having trouble with the assertion (actually made on the ethics thread, but anyway) that you can separate 'developing' countries and 'capitalist' countries, as if the exploitation of the former by the latter isn't an utterly inextricable part of capitalism, and has been for the past 400 years- surely this exploitation was concommitant with capital's rise from the very start.
and if there is a truth of capitalism, surely it lies in the production in chinese factories, the wars over diamond reserves in congo, in famine in niger up the road from cash crops and so forth-


sure, there is one world, so what? cancer is also part of this world. i dont see the conceptual
value of reducing everything that happens in this world to capitalism. violence, famine, exploitation
and the like existed before capitalism. that suggests more basal mechanisms than economic organisation at play. basically, your analysis is undercomplex. in particular the issue of physical
violence and state organisation, demonstrably not connected to economic organisation is insufficiently thematised.

incidentally, china's development exploded and is now providing a far greater part of its population with a better lifestyle exactly when they transitioned to a fairly liberal form of free market. i find this a remarkable and surprising development.



this is what it means for the majority of people in the world -and as borderpolice points out (in one of his rare points that isn't an aggressive non-sequiteur), it is nothing if not a world system, a total system without an 'outside'-- so talking about it in terms of the prosperity it provides in a few places is something of a smokescreen, no?

apologists of capitalism generally reply to this by saying that it is a lack of capitalism
in thirdworld countries that is to blame here. i'm not personally terribly convinced by
this, but prima facie, these arguments are not worse than those in the socialist in this
matter, but equally too simple.

the empirical evidence is this: most straightfortward modernisation efforts of third world
countries -- capitalist or socialis -- have failed. this is very interesting in itself and on ce
more suggests that a purely economic focus is misleading. second empirical fact: where
poor countries have lifted themselves out of poverty, this usually happened by economic
liberalisation and through an authoritarian government that made things like universal
education a priority.

maybe there's a message in there, i'm not sure.

borderpolice
12-12-2005, 10:16 AM
Right, good, can we stay back on track and avoiding letting this become an ideological battle with BP.... can we specify what it is that makes that relationship of exploitation inevitable and necessary rather than merely contingent?

translation:let's ignore good arguments!

borderpolice
12-12-2005, 10:21 AM
The picture of "capitalists" and "workers" in the discussion so far has been quite a 19th century one. The factory workers, covered in grime, toil for 14 hours a day whilst the fat "owner" smokes a cigar & fiddles with his pocket watch. Or even a developing world one - where sweat shop labours also toil long hours for minimal pay.

that's very true. the whole theory was developed in the context of small factories, with
close physical proximity of all involved. much of the theoretical poverty of socialist though
comes from this lack of modernisation. from replacing understanding of the world by
faithful veneration of the early socialist classics.



Who are these capitalists? Well, in the UK: 1. Foreigners, 2. Insurance Companies & 3. Pension Funds.
http://www.statistics.gov.uk/CCI/nugget.asp?ID=107&Pos=1&ColRank=2&Rank=960


and most of those foreigners are again insurance companies and pension funds.
it makes sense to say that crudly put everybody in developed countries is a capitalist.
or to put it more starkly, there is no working class in the developed world.

the exploited/expoiter distinction becomes more pertinent once we globalise our view
and consider the third world.

borderpolice
12-12-2005, 10:29 AM
Yes, but surely countries that are being exploited by First World countries are, far from being outside the capitalist system, integral to it. They are different from countries like Cuba or North Korea, surely, which could much more convincingly be positioned outside capitalism.

and cuba as well as north korea are doing smashingly, innit!

Omaar
12-12-2005, 11:15 AM
incidentally, china's development exploded and is now providing a far greater part of its population with a better lifestyle exactly when they transitioned to a fairly liberal form of free market. i find this a remarkable and surprising development.

The number of people living in poverty has decreased, true, but partly due to foreign aid, not necessarily due to liberalisation. Meanwhile the disparity between the rich and poor continues to widen:

"REUTERS, dec1 2005: The wealth gap between China's cities and largely impoverished countryside could be wider this year than at any time since the late 1970s and may grow further, a top party official said in remarks published on Thursday.

That's not surprising

Liberalisation doesn't really mix well with a totalitarian state, leading to all kinds problems such as this (http://today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2005-12-12T084535Z_01_FOR219415_RTRUKOC_0_US-CHINA-PROTEST.xml&archived=False)

johneffay
12-12-2005, 11:56 AM
Yes, but surely countries that are being exploited by First World countries are, far from being outside the capitalist system, integral to it. They are different from countries like Cuba or North Korea, surely, which could much more convincingly be positioned outside capitalism.

Absolutely. I didn't mean to imply that the two points I was making in response to Owen were related.

owen
12-12-2005, 03:48 PM
cuba and north korea are interesting as socialism's last remnants (well, except for government subsidies to the military and business in most 'developed' countries, obv :p ) - the acceptable and liberal-friendly (ish- obviously their policy on homosexuality is somewhat dubious) on one hand and an utterly terrifying stalinist monolith on the other. but the former does have the highest standard of living (in terms of heath, education etc rather than ostentatious wealth) in latin america, so they're doing ok, no?

re borderpolice on china and the alleged non-'development' of the third world- well, countries that have severely constrained unfettered capitalism through various keynesian or protectionist measures (singapore, south korea, japan, to a great extent china) have done pretty well, while those that have followed structural adjustment programmes, deregulation and generally adhered to that curious formulation 'the market' (sub-saharan africa, for instance, or the former USSR) have tended to get utterly screwed. QED.

i'd suggest, at the risk of sounding simplistic, that the reason for the inherence of 'exploitation' to capitalism is surely for similar reasons to why adam smith thought it was a good thing, i.e it's a system based on (short term) self interest. and the 'hidden hand' that supposedly guides this obviously doesn't exist.

effay's criticism is interesting- what i was saying though was not that the 'market' is some kind of universal principile, rather that the dividing up of 'capitalism' into capitalist countries and developing countries which will at some point become capitalist is fallacious- one guarantees the existence of the other.

k-punk
12-12-2005, 05:51 PM
translation:let's ignore good arguments!

real translation: let's stay on topic. If you want to pick fights with anti-capitalists, go on to the ethics thread or indeed start your own 'capitalism is great' thread. It would be good if this thread could return to its stated objective of defining capitalism. Anything you have to say on that topic would be welcomed, by me at least.

k-punk
12-12-2005, 06:04 PM
i'd suggest, at the risk of sounding simplistic, that the reason for the inherence of 'exploitation' to capitalism is surely for similar reasons to why adam smith thought it was a good thing, i.e it's a system based on (short term) self interest. and the 'hidden hand' that supposedly guides this obviously doesn't exist.


I'd question this though: is it really true that capitalism is based on pursuit of self-interest? Isn't it based on the interests of capital, to which everything else must submit? Yes there's a coincidence between the interests of capital and the interests of particular groups or individuals, when those interests are defined in narrowly economic terms, but capitalism isn't run FOR those interests, rather it has to appeal to them in order to reproduce itself.

Which is why I don't think the discussion thus far has been hidebound by a nineteenth century model of cigar-smoking plutocrats putting out cigars on the heads of toiling workers and - contra MBM's derision - it's perfectly possible for a self-employed person to exploit themselves; or - to be more accurate - for one person to be exploited by capital withouth the involvement of any other human being. Just look at the 60 + hours a week that many self-employed people do if you doubt that. It isn't one group of human beings that exploits another under capitalism (that sounds more like feudalism) - it is capital that exploits everyone.

borderpolice
12-12-2005, 06:18 PM
but the former does have the highest standard of living (in terms of heath, education etc rather than ostentatious wealth) in latin america, so they're doing ok, no?

but why compare with south america? why not with capitalist wonderland and nearest
neighbour USA? vastly lower living standard than neighbouring florida though. so there!


re borderpolice on china and the alleged non-'development' of the third world- well, countries that have severely constrained unfettered capitalism through various keynesian or protectionist measures (singapore, south korea, japan, to a great extent china) have done pretty well, while those that have followed structural adjustment programmes, deregulation and generally adhered to that curious formulation 'the market' (sub-saharan africa, for instance, or the former USSR) have tended to get utterly screwed. QED.

what does that prove other than that certain forms of capitalism are better than others. that's just saying that thinking of capitalism as one thing is wrong. oversimplistic. which is one of the points i have been making all along.

jasonh
12-12-2005, 06:23 PM
It isn't one group of human beings that exploits another under capitalism (that sounds more like feudalism) - it is capital that exploits everyone.

I think therein lies the point - tracing an origin of capitalism becomes a hunt for where does capital become something intrinsically separate from labour? At the present time, where capital is so slippy to define (where "cash" is a string of digital information) it is difficult to see where the joins are IMHO. Marx's line "everything solid melts into air" becomes more apposite the further this type of information capitalism progresses.

Capitalism in its modern form, for me, starts with stock exchanges, where as someone has stated in a previous post, capital is used to simply begat more capital. The labour involved becomes relatively unimportant as a result.

As for North Korea and Cuba - perfect examples of the much maligned "state capitalist" model. I'm still a firm believer in the notion that we never got a true socialist society - they all seemed rather too close to Nazi Germany for my liking, and were rather distasteful as a result.

borderpolice
12-12-2005, 06:29 PM
As for North Korea and Cuba - perfect examples of the much maligned "state capitalist" model. I'm still a firm believer in the notion that we never got a true socialist society - they all seemed rather too close to Nazi Germany for my liking, and were rather distasteful as a result.

"state capitalism" is an especially poor excuse not to deal with what went on in the former eastern block. i think "denial" is the proper term.

incidentally, if you look at what the Communist manifesto clearly states as key communist goals,
cited below for your convenience,then

- they were all met in the soviet union and its allies,

- almost all of them are met in the western developed states.

maybe that's of relevance.

------- from http://www.anu.edu.au/polsci/marx/classics/manifesto.html ----

1. Abolition of property in land and application of all rents of land to public purposes.

2. A heavy progressive or graduated income tax.

3. Abolition of all rights of inheritance.

4. Confiscation of the property of all emigrants and rebels.

5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.

6. Centralization of the means of communication and transport in the hands of the state.

7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.

8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.

10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc.

jasonh
12-12-2005, 06:34 PM
I used "state capitalism" as a term for what I believe went on in the Eastern Bloc as far as the economics was concerned. The social aspects were simply disgraceful - I wouldn't ever deny what went on there. I've read enough of Solzhenitsyn and "Black Book Of Communism" to be able to state quite categorically that describing the regimes responsible as "evil" barely covers it.

It is interesting that what Marx/Engels described as communism in the Manifesto was brought to fruition in Russia. That may well be true as a paper exercise, but the true spirit of what a communist society should be (egalitarian, free, abolition of capital etc) was never reached at any point.

owen
12-12-2005, 08:10 PM
but why compare with south america? why not with capitalist wonderland and nearest
neighbour USA? vastly lower living standard than neighbouring florida though. so there!

the respective responses of cuba and the US to hurricane katrina might suggest otherwise, eh

also keynesianism may well be a 'type of capitalism' but one based on restricting and imposing upon capital so my point stands clearly enough.
k-punk's points i'll reply to in a bit...

MBM
12-12-2005, 10:27 PM
and - contra MBM's derision - it's perfectly possible for a self-employed person to exploit themselves

At no point did I claim it was impossible for a self-employed person to be exploited (by another or by themselves). I was trying to point out the complexity of the situation rather than pitch for derision.

More later - I have to go off and be exploited for a bit...

k-punk
12-12-2005, 10:50 PM
At no point did I claim it was impossible for a self-employed person to be exploited (by another or by themselves). I was trying to point out the complexity of the situation rather than pitch for derision.
.

Apologies if I misunderstood your drift. I certainly didn't mean to sneer.

D84
12-12-2005, 11:18 PM
OK my take on capitalism is that it's all about capital: it's the power to invest and to make money - and so by extension it has become about the power to achieve a certain quality of life at others' expense. This is a bit of a leap but if you can imagine that any business these days needs a constant stream of cash-flow to exist, and a business is supposed to support its employees and managers' lifestyles (eg. rent and food), then it's under the power of those supplying the investment, whose power becomes political as what could be more political than providing for food.

But for the symptoms of capitalism such as pension scheme fraud - anyone remember Robert Maxwell and what he did to his employees' pension schemes? The House of Lords decided in favour of the fanaciers' (capitalists') rights over those of the ordinary workers whose money had been misappropriated - even though there was evidence of these same financiers had acted somewhat dubiously in their handling of the stocks. This structural bias in favour of a certain class is capitalism in action.

I also question the assertion that poverty has been falling thanks to capitalism. Could anyone provide some evidence or statistics to prove that?

All the evidence I've seen points in the opposite direction.

eg.
This page (http://www.globalissues.org/TradeRelated/Facts.asp) says that half the world, ~3 billion people, live on less than 2 USD a day, assuming everything costs the same as it does in the US.

On the same page (http://www.globalissues.org/TradeRelated/Facts.asp), they list this interesting statistic:

"An analysis of long-term trends shows the distance between the richest and poorest countries was about:
* 3 to 1 in 1820
* 11 to 1 in 1913
* 35 to 1 in 1950
* 44 to 1 in 1973
* 72 to 1 in 1992 "

This page says (http://www.irp.wisc.edu/faqs/faq3.htm): "In 2001 the number of poor and the poverty rate both rose as economic difficulties moved into recession, and the rate has continued to rise; in 2003, 35.8 million people were poor by the official measure of poverty. In 2004, the number rose to 37 million people (12.7 percent of the population)."

So really capitalism is increasing the level of poverty in the world.

Why? because it is a system for the generation and accumulation of capital among a certain class - and keeping it there.

In a finite system, when you move/accumulate matter in one part, there will be a lack accordingly in another part.

As for the Eastern Bloc, well didn't Marx say that Communism is the next stage of development after Capitalism? So presumably when you try to impose communism in a place which is still very much feudal (eg. by deposing a monarchy) then it's probably not going to work. But then again I don't think our society is purely capitalist anyway: I feel it's an amalgam of Slavery, Feudalism and Capitalism, which is the dominant form.

DigitalDjigit
13-12-2005, 05:23 PM
Just to clear up something. Capital is not the same thing as money. Capital is actual stuff like tools, factories, gold, knowledge etc. No capital is created or destroyed in the stock market. What happens is trying to assign a monetary value to capital represented by stocks.

johneffay
13-12-2005, 06:58 PM
Just to clear up something. Capital is not the same thing as money. Capital is actual stuff like tools, factories, gold, knowledge etc. No capital is created or destroyed in the stock market. What happens is trying to assign a monetary value to capital represented by stocks.

Not according to Marx it isn't:


The first distinction between money as money and money as capital is nothing more than a difference in their form of circulation (Capital, I, chapter 4).

Money is transformed into capital when it is used in an economic transaction to buy commodities with the intention of selling them to turn them back into a money (preferably, but not necessarily, at a profit). So in the circulation of capital, money is mediated by the commodity.

k-punk
13-12-2005, 09:01 PM
Just to clear up something. Capital is not the same thing as money. Capital is actual stuff like tools, factories, gold, knowledge etc. No capital is created or destroyed in the stock market. What happens is trying to assign a monetary value to capital represented by stocks.

Capital isn't the same thing as money, but not because it is more concrete. Quite to the contrary, capital is hyper-abstract. Capital items such as tools, factories, etc are 'fixed capital' as opposed to 'circulating capital'. They aren't acquired for their own intrinsic properties but only because they will lead to greater profits (which

You can also distinguish between finance capital (which is capital in its purest, which is to say, most abstract form) and payment capital (i.e. money as cash). What workers receive is payment capital; what capitalists invest is finance capital. This is not to say that the same individuals can't own both finance capital and payment capital. Finance capital can't be spent (only cash can be spent), it can only be invested. Once it is spent on items which are not purchased to produce a profit, it is no longer capital but cash.

Canada J Soup
13-12-2005, 09:17 PM
it is not unreasonable to say that certain types of risk taking behavior should be more highly rewarded than others
That depends on how you quantify risk. Does a large capital investment by one individual in a logging business constitute greater or less risk than that taken by another individual who works as a timber cutter? Should the fact that the investor can spread his or her capital across multiple different investments simultaneously to hedge against the risk inherent in one be considered when reward is apportioned?

It seems to me that much of what is problematic about capitalism stems from its using capital (and, increasingly, from focusing on capital in forms that have no intrinsic value) as its chief metric. The success of an endeavor is measured by the amount of capital it generates almost to the exclusion of all else. This ensures that capital continues to have a disproportionately high value placed on it within the system. Which ensures that those who control the most capital have a disproportionate influence on the system. Which will ensure that the system continues to use capital as its chief metric.

(Edited for clarification)

MBM
14-12-2005, 05:34 AM
I think that the capitalist model is actually quite useful. However, it is only useful within boundaries and one current problem we have is that certain groups are pushing for capitalism as everything. The collapse of a concept of the public good (been reading John Ralston Saul (http://en.wikipedia.org/wiki/John_Ralston_Saul) on this recently) and the replacement of the citizen with the consumer are very worrying.


Kpunk:
I'd question this though: is it really true that capitalism is based on pursuit of self-interest? Isn't it based on the interests of capital, to which everything else must submit?

But if it was in no one's interest, it would be abandoned as a project. The fact is that a small but significant group benefit from captialism and the benefits they accrue allow them to maintain it as a system. You seem to want to imply an agency to capitalism - which is an interesting move but I'm not sure I buy it.

Canada:
The success of an endeavor is measured by the amount of capital it generates almost to the exclusion of all else.

The term bandied about is "managing for shareholder value". Which is fair enough (within boundaries). However a only a fool would try to lead for shareholder value: "Hi everyone, I want you to bust your guts for a bunch of faceless institutions..."

k-punk
14-12-2005, 05:33 PM
I think that the capitalist model is actually quite useful. However, it is only useful within boundaries and one current problem we have is that certain groups are pushing for capitalism as everything. The collapse of a concept of the public good (been reading John Ralston Saul (http://en.wikipedia.org/wiki/John_Ralston_Saul) on this recently) and the replacement of the citizen with the consumer are very worrying.

But there are no boundaries with capitalism. Capital literally - which is to say abstractly - reduces everything to itself simply by dint of the fact that it is the form of general equivalence.



But if it was in no one's interest, it would be abandoned as a project.

You're presuming quite a lot here. 1 that human beings act in their own interests (not very much evidence of that, really). 2 that people abandon things that aren't in their own interests (ask a drug addict about that one). 3 that people know what their interests are (whole history of psychoanalysis gives the lie to that) 4 That capitalism is a 'project' willingly undertaken as such.


The fact is that a small but significant group benefit from captialism and the benefits they accrue allow them to maintain it as a system.

They benefit financially, i.e. in capital's terms. But it's difficult to see that someone who has a billion dollars, i.e. vastly more than they could spend in their own lifetime, is 'benefitting' from having that money. Rather, capital benefits from them, since they are an effective means of its replication.

Monetary accumulation can't be equated with someone's actual interests, not automatically. But even if it were, there still has to be a story about why the vast majority who don't enjoy such benefits go along with capitalism. There are libidinal-economic fixations which people think of as their own interests, for sure.



You seem to want to imply an agency to capitalism - which is an interesting move but I'm not sure I buy it.

I'll do more than imply it, though I think some nuancing is required. It's not capitalism - the system dedicated to the replication of capital - which has agency but Capital, a vast parasitic artificial intelligence system which reproduces human beings as a means of reproducing itself.

MBM
15-12-2005, 04:28 AM
K-Punk: V v interesting.


But there are no boundaries with capitalism. Capital literally - which is to say abstractly - reduces everything to itself simply by dint of the fact that it is the form of general equivalence.

There are no boundaries created by capitalism but there are those imposed upon it - e.g. altho many companies say they are only responsible to their shareholders, governments & communities can prevent them carrying out socially destructive acts in pursuit of profit.

Many systems are inherently "imperialist" & all-consuming - capitalism is one of these (a particularly virulent version).


You're presuming quite a lot here. 1 that human beings act in their own interests (not very much evidence of that, really). 2 that people abandon things that aren't in their own interests (ask a drug addict about that one). 3 that people know what their interests are (whole history of psychoanalysis gives the lie to that) 4 That capitalism is a 'project' willingly undertaken as such.

Hmmm. Capitalism does prescribe what are "acceptable" and "unacceptable" interests (i.e. "acceptable" = pursuit of profit).

However, would you agree or disagree that some groups do better materially out of capitalism than others?

Canada J Soup
15-12-2005, 05:46 AM
There are no boundaries created by capitalism but there are those imposed upon it - e.g. altho many companies say they are only responsible to their shareholders, governments & communities can prevent them carrying out socially destructive acts in pursuit of profit.

A major issue here is that - election campaigns (particularly in the US) being as expensive as they have become - governments are increasingly more beholden to corporate interests than they are to those of their constituents.

The problem with corporations primarily focusing on maximizing shareholder value has already been touched on. Something that I think is almost as important to the concept of Capital as a system that we cannot fully control is the the tendancy for capital markets to provide greater rewards for focusing on the short term game. Companies that are generating positive free cash flows and using them to grow now receive the highest valuations, even if their activities may have a negative impact in the long term (more so if the negative impact can be externalized). Capital can be moved quickly and easily to a better investment once the long term threatens to come around. Because of this, a socially destructive activity that carries a high net present value (even after the cost of lobbying politicians to let it occur and presenting positive PR spin have been factored in) remains appealing when analyzed under the criteria that capitalism uses. It's tough to legislate the right boundaries, partly because it's difficult to determine where they are and partly because the money to be made now often makes the actors involved lose sight of other aspects.

Edit: I just found a good article about the tendency to focus on short term performance here (http://www.expectationsinvesting.com/TCO/EconomicsofShortTerm.pdf) (pdf file)...the focus is apparently even shorter than I had expected. Naturally, a factor is that it is cheaper and easier to perform analysis on discounted cash flows in the short term. Another instance of the system reinforcing itself...

borderpolice
15-12-2005, 11:16 AM
But there are no boundaries with capitalism. Capital literally - which is to say abstractly - reduces everything to itself simply by dint of the fact that it is the form of general equivalence.

not so simple. it is not 'capital' that "educes everything to" "general equivalence". it is something that humans have been doing, by having preferences, in the face of scarcity (in a generalised sense). I cannot go to a pizzaria and to the cinema at the same time, hence i make a decision which one i prefer. by this decision process i compare eating with watching. the monetarisation of this does not in the slightest produce any additional comparison of 'incomparables', rather, it is what modern sociology calls a "generalised communication medium", which like other such media (love, truth, right, education, health ...), is a social tool to increase the probability of other's acceptance of once preference selections, even without additional interaction. Example: if i go to the butcher and ask for a sausage, why on earth should she give me one, just like that? the evolution of money makes it likely to have such an exchange, easily and without hassle, thus leaving me free to pursue more interesting things.

this is the function of money: to make other's accept decisions based on future contingents to do with scarcity, with little additional communication effort. Universal comparability has nothing to do with money (or rather is not the new element modernity's monetarisation introduces), it's there already in human need and ability to form and act on preferences. the function of the market (like that of elections, focus groups, 'opinion') is a simplified representation of other's ideas and expectations about the relevant future contingents.



It's not capitalism - the system dedicated to the replication of capital - which has agency but Capital, a vast parasitic artificial intelligence system which reproduces human beings as a means of reproducing itself.

yes and potato farms use humans to reproduce more potato farms, cars use humans to produce more cars, laughter is just a parasite that uses humans to produce more laughter, yawns use humans to produce more yawns, genes exploit humans to reproduce themselve, as do viruses. popmusic employs teenagers to produce more pop-music, and so on and so on.

my point: many reproductive processes can be described in the same way as you (and many before you) have described capital. it's hardly specific to capital, and there's nothing wrong with it per se. it's a good engineering technique for dynamic stability, facilitating easy adaptation to changing environments. if you want to find out what's specific about capitalism, you've gotta work harder. my suggestions above, about communication media, and social mechanisms of furture contingent risk and scarcity management is more promising.

k-punk
15-12-2005, 01:01 PM
not so simple. it is not 'capital' that "educes everything to" "general equivalence". [

Yes it is. :)


it is something that humans have been doing, by having preferences, in the face of scarcity (in a generalised sense). I cannot go to a pizzaria and to the cinema at the same time, hence i make a decision which one i prefer. by this decision process i compare eating with watching. the monetarisation of this does not in the slightest produce any additional comparison of 'incomparables', rather, it is what modern sociology calls a "generalised communication medium", which like other such media (love, truth, right, education, health ...), is a social tool to increase the probability of other's acceptance of once preference selections, even without additional interaction. Example: if i go to the butcher and ask for a sausage, why on earth should she give me one, just like that? the evolution of money makes it likely to have such an exchange, easily and without hassle, thus leaving me free to pursue more interesting things.

Hmm, this anthropologization might work if human beings hadn't had preferences and faced scarcity since they emerged on earth. The mechanism of general equivalence that is capitalism is, however, a relatively new development in human affairs.


this is the function of money: to make other's accept decisions based on future contingents to do with scarcity, with little additional communication effort. Universal comparability has nothing to do with money (or rather is not the new element modernity's monetarisation introduces), it's there already in human need and ability to form and act on preferences. the function of the market (like that of elections, focus groups, 'opinion') is a simplified representation of other's ideas and expectations about the relevant future contingents.

I'm totally confused by this; what are you saying, that there is nothing special about money at all, that it can be explained away naturalistically as a quasi-organic expression of innate needs and tendencies? The claim 'universal comparability has nothing to do with money' is bizarre ... WHAT is the medium of equivalence prior to money?
Then, suddenly, we're into markets --- there is no necessary relationship between markets and capital, markets having existed for thousands of years before the arrival of capital. And of course the representational account of elections, focus groups etc misses the elementary fact that these phenomena do not merely represent, they produce changes in the very behaviour they supposedly record.


yes and potato farms use humans to reproduce more potato farms, cars use humans to produce more cars, laughter is just a parasite that uses humans to produce more laughter, yawns use humans to produce more yawns, genes exploit humans to reproduce themselve, as do viruses. popmusic employs teenagers to produce more pop-music, and so on and so on.

Hmmm, this would be fine, except: how do yawns induce human beings to reproduce themselves? There's a difference between using humans to replicate and being able to induce human beings to reproduce in order to replicate.


my point: many reproductive processes can be described in the same way as you (and many before you) have described capital.

sure, it's not an original description


if you want to find out what's specific about capitalism, you've gotta work harder.

Yeh but see it wasn't an attempt to find out what's specific about capitalism, it was an answer to the question 'does capitalism have agency?'


my suggestions above, about communication media, and social mechanisms of furture contingent risk and scarcity management is more promising.

Is it now? Produce the definition then. Scarcity management is common to all human societies so I can't see how that's going to cut it. Communication media have changed massively over the five hundred years since capitalism started. The risk point is more promising, but I'm not convinced it can define capitalism, rather it's one of the effects/ consequences of a capitalist economy.

borderpolice
15-12-2005, 01:30 PM
Hmm, this anthropologization might work if human beings hadn't had preferences and faced scarcity since they emerged on earth. The mechanism of general equivalence that is capitalism is, however, a relatively new development in human affairs.

Yes, humans have had preferences and faced scarcity since they emerged on earth. that's what i'm saying. the introduction of money does not change that. money is a form of communication technology that facilitates communication preference decisions and expectations about future contingents. the novel thing about the emergence of money, which happened prior to what you call capitalism, is that it drastically increases the reach of exchange and the probability of acceptance of an exchange. prior to money goods were bartered. just as with money, that involved comparing and exchanging uncomparables.
what's new is that everyone acceptes money in exchange for a good now. i no longer have to find a butcher who's willing to take my toothbrush for his sausage, which may be difficult, i only have to find a butcher who takes my money. that's much easier.



I'm totally confused by this; what are you saying, that there is nothing special about money at all, that it can be explained away naturalistically as a quasi-organic expression of innate needs and tendencies?

we can always reduce to lower explantory levels, like needs and communications or atoms. that's not always very useful because reductions become too complex. what i said was this:money is a communication tool allowing more efficient communication about expectations future contingent distributions of need and scarcity. that's what's special about money. there are other communication media the sense of modern sociology. but universal exchange is not what distinguishes monetary economies from bartering.


The claim 'universal comparability has nothing to do with money' is bizarre ... WHAT is the medium of equivalence prior to money?

the goods themselves: i give you a magic sword if you give me your daughter. i eat pizza or i eat honey ...



Then, suddenly, we're into markets --- there is no necessary relationship between markets and capital, markets having existed for thousands of years before the arrival of capital.

sorry, the market thing was just an additional point that i found interesting to say, but it
was not really relevant to the rest of the text.



And of course the representational account of elections, focus groups etc misses the elementary fact that these phenomena do not merely represent, they produce changes in the very behaviour they supposedly record.

as does the market, and science. this explicit self-reference is one of the key features of modernity. the self-reference involved in for example the derivatives market where you
buy and sell essentially insurance policies on prices is but an example of this, and hardly something specific to the modern monetary system.



Hmmm, this would be fine, except: how do yawns induce human beings to reproduce themselves?

it is in fact unknown how yawning works. and i'm not sure capitalism can take all
the blame for reproduction of humans, sex has been around for a bit.




Yeh but see it wasn't an attempt to find out what's specific about capitalism, it was an answer to the question 'does capitalism have agency?'

agency is an ascription. so yes, many people describe capitalism as having
agency. hence it has. i'm not sure that is a fruitful way of analysis though,
analying the concept of agency itself is interesting, and the distribution of
agency ascriptions.



Is it now? Produce the definition then. Scarcity management is common to all human societies so I can't see how that's going to cut it.

and i have denied this where? what i have been saying is that the modern economy is a specific way of doing this.



Communication media have changed massively over the five hundred years since capitalism started. The risk point is more promising, but I'm not convinced it can define capitalism, rather it's one of the effects/ consequences of a capitalist economy.

money has not in fact changed, only it's scope -- a bit. risk is a consquence of lack of predictability of the future, what has changed is how we deal with it. and yes, the modern economy introduces new forms, like inflation, deflation. it is not plausible to me however, how other forms of economic organisation would do substantially better. they would push the risk in other shapes. you are welcome to propose novel risk management schemes.
i would love to hear about it. jsut whinging about the (well-known) problems of the current economic scene is not very productive

DigitalDjigit
15-12-2005, 02:23 PM
There's more to capitalism than managing risk, surely? It's a social organisation, new roles are created (worker, stock owner etc.)

So is "pure" capitalism the free market, laissez-faire libertarian dream? Then why despite the allegiance of western governments to the project of capitalism and the powerful control Capital exerts has this version of capitalism not triumphed. We seem to be getting further and further away from it. It's almost back to feudalism in certain ways.

What are sweatshop workers but serfs? What are the corrupt government officials who also happen to be owners or on boards of corporations if not the new(old?) aristocracy? The poor pay the taxes. There is less social mobility and more inequality whether in ownership or political power.

borderpolice
15-12-2005, 03:44 PM
There's more to capitalism than managing risk, surely? It's a social organisation, new roles are created (worker, stock owner etc.)

sure.


There is less social mobility and more inequality whether in ownership or political power.

Compared to what? feudal times? hardly. and there's widespread upwards social mobility,
just consider the recent economic rise in the far east. social mobility in the established
first world states seems fairly stable, ablthough i wont rule out recent changes. figures, numbers?

DigitalDjigit
15-12-2005, 05:15 PM
Compared to what? feudal times? hardly. and there's widespread upwards social mobility,


I meant compared to twenty years ago.

http://news.scotsman.com/uk.cfm?id=438162005
"Class barrier more easily broken by those born in 1958 than 1970" (for uk only)

http://www.post-gazette.com/pg/05133/504149.stm
though this one says " Americans are no more or less likely to rise above, or fall below, their parents' economic class than they were 35 years ago." so maybe that's not so correct there.

owen
15-12-2005, 06:22 PM
i.e, 20 years ago before the introduction of various reforms generally classified under the rubric of 'neo-liberalism' (though allegedly this and social democracy are indistinguishable ;) )

fldsfslmn
16-12-2005, 11:46 PM
it is in fact unknown how yawning works. and i'm not sure capitalism can take all the blame for reproduction of humans, sex has been around for a bit.

The primary difference between sex and capitalism is that there are many natural mechanisms for the regulation of exactly how many humans can be produced by sex, whereas capitalism has proven infinitely more successful—and so far without a ceiling of any sort. :)

Light Touch
31-12-2005, 11:39 PM
Capitalism is the production, delivery, and consumption of goods with no (or little) active guidance. The only guidance comes from passive factors, such as supply of goods, demand for goods, and the relative cost of the production, delivery, and consumption thereof.

Capitalism has never caused a war. Some capitalists have used existing power structures to maximize their gain through the use of improper war, but I'd blame the power structure (or the access thereto) before I'd blame capitalism.

vimothy
15-04-2008, 02:51 PM
*bumps interesting thread*

borderpolice's comments = suprisingly good

noel emits
15-04-2008, 03:09 PM
Yeah definitely looks interesting, will give it a read when I have more time.

Side note: that's not the same Jason H that did that Calenda record is it?