ok, then, what is capitalism?

owen

Well-known member
borderpolice said:
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

Well-known member
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

Spectres of Mark
MBM said:
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

Well-known member
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 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, 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: "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

Honky Tonk Woman
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

Well-known member
DigitalDjigit said:
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

Spectres of Mark
DigitalDjigit said:
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

Monkey Man
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)
 
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MBM

Well-known member
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 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

Spectres of Mark
MBM said:
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 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

Well-known member
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

Monkey Man
MBM said:
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 (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...
 
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borderpolice

Well-known member
k-punk said:
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.


k-punk said:
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.
 
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k-punk

Spectres of Mark
borderpolice said:
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

Well-known member
k-punk said:
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.


k-punk said:
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.

k-punk said:
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 ...


k-punk said:
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.

k-punk said:
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.

k-punk said:
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.


k-punk said:
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.


k-punk said:
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.

k-punk said:
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

Honky Tonk Woman
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

Well-known member
DigitalDjigit said:
There's more to capitalism than managing risk, surely? It's a social organisation, new roles are created (worker, stock owner etc.)
sure.

DigitalDjigit said:
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

Honky Tonk Woman
borderpolice said:
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

Well-known member
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

excremental futurism
borderpolice said:
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. :)
 
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