ok, then, what is capitalism?

[owen]

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]

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]

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]

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]

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]

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]

Capitalisms

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]

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]

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]

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]

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]

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

 

[johneffay]

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]

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 ) - 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]

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]

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]

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]

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]

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]

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.