@o_o@programming.dev asked “why are folks so anti-capitalist?” not long ago. It got quite a few comments. But I noticed a trend: a lot of people there didn’t agree on the definition of “capitalism”.
And the lack of common definition was hobbling the entire discussion. So I wanted to ask a precursor question. One that needs to be asked before anybody can even start talking about whether capitalism is helpful or good or necessary.
Main Question
- What is capitalism?
- Since your answer above likely included the word “capital”, what is capital?
- And either,
- A) How does capitalism empower people to own what they produce? or, (if you believe the opposite,)
- B) How does capitalism strip people of their control over what they produce?
Bonus Questions (mix and match or take them all or ignore them altogether)
- Say you are an individual who sells something you create. Are you a capitalist?
- If you are the above person, can you exist in both capitalist society and one in which private property has been abolished?
- Say you create and sell some product regularly (as above), but have more orders than you can fulfill alone. Is there any way to expand your operation and meet demand without using capitalist methods (such as hiring wage workers or selling your recipes / process to local franchisees for a cut of their proceeds, etc)?
- Is the distinction between a worker cooperative and a more traditional business important? Why is the distinction important?
Sounds like Poly Sci homework. How about you answer the questions and post them here.
Sure. To me,
capitalism is any system that supports ownership of any property – oil rigs, land, factories, assembly lines, burger machines, copyrights and patents, mines, farms, etc – that is used to collect the products of another person’s labor. (For example, when the oil rig worker is payed a wage, but the oil rig owner owns the oil that was pumped, that’s capitalism.)EDIT: Wolfhound pointed out that my definition ought to specify who is allowed to to control this property. And that’s true.
Capitalism is any system that permits all people (or non-person entities) with sufficient wealth to own property – oil rigs, land, factories, assembly lines, burger machines, copyrights and patents, mines, farms, etc – that is used to collect the products of another person’s labor. (For example, when the oil rig worker is payed a wage, but the oil rig owner or oil rig corporation owns the oil that was pumped, that’s capitalism.)
The property used in the above manner is called capital, or private property. The person using it is called a capitalist.
As for whether it is conducive to workers controlling what they produce, my answer is that – by definition – capitalism allows someone else to control what workers produce. It does not guarantee a worker any power over what they produce, and in the majority of cases (where a worker must pay rent, health insurance, food, etc and cannot afford to start their own business or buy their own equipment) it actually pressures workers into situations where they do not control what they produce.
Too short Owen. Assignment is 1250 words minimum with proper MLA citation. Resubmit before the deadline.
🤣 🤣
Look, I promise: I was just annoyed at people talking past each other on the question @o_o@programming.dev asked. And I just wanted to ask the question in a way that might address the problems that o_o’s question ran into.
I really feel like this definition is fairly incomplete. All the traits you mentioned can also describe feudalism, but replacing “capitalist” with “noble”, which is sanctioned and invested by other nobles or the suzerain. You could say that capitalism is “any system that supports private ownership of private property that is used to collect the products of another person’s labor”. With the mention that the private ownership can be asserted by either a person or an organized group of persons, but both private entities
Ah… good point. My description did nothing to distinguish capitalism from feudalism. There is necessity for some mention of who is allowed ownership of this form of property. (Or what is allowed ownership as is often the case.)
As for the word private though: I wanted to avoid more terms I would need to define that might obscure my definition. Also I’m not even sure what distinguishes private ownership from other kinds of ownership. Or what makes a private entity.
But thanks for the input. At some point I’ll edit my definition.
Copyrights and patents
Used to collect the products of another person’s laborIf you ask me it’s the exact opposite… Copying someone else’s work with no benefit to them removes a big driver for innovation.
This also only really applies with corporations - you could in theory have everyone be self-employed in a capitalist society
Ideally, copyrights and patents would protect the small inventor and small musician. Unfortunately, wielding copyrights and patents in any useful way requires other forms of capital. (You have to have wealth in order to sue someone for infringement.)
However that’s an issue with the legal system rather than anything else and could also exist without capitalism - it’s possible for the legal system to be dominated by any powerful entity from corporations to the state to unions depending on the political system, and if you don’t have enough sway within one of those powerful entities then tough luck
Capitalism is an economic system where capital is considered a valid input to the production process, worthy of renumeration. Contrast with some other systems where labor is the only valid input.
Capital is material wealth used productively.
Capitalism empowers ownership of produced good by laborers by funding new ventures where laborers can be more self-directed than if they were forced to labor under the direction of others. Capitalism erodes control from laborers by introducing a non-labor stake in the venture. Both are true.
An artisan who sells what they produce is free to be a capitalist or not, the two are unrelated.
Such a person cannot exist in a society without private property, as “selling” is not a valid concept in such a society. Artisans in general would still exist, though, and probably more abundantly.
An artisan who has more work orders than she can fill alone can expand without the methods you describe. She can form a partnership with another artisan, and teach or otherwise share her methods of production, tools, and branding. This could be an equal partnership or something more like taking an apprentice.
The distinction between worker coöps and other businesses is important, but it’s also important to recognize that coöps are a subset of businesses, not an opposing type of entity. Coöps have just as much ability to behave in a predatory manner towards consumers, and almost as much potential to seek self-perpetuation and growth at the expense of their environment. That they will be less predatory towards laborers is nice, but it’s not enough to make them “safe”.
I’m with J Lou. Even Marx considered capital a valid input to the production process. He just thought it was being misused.
He believed the workers should control capital democratically. He believed our current treatment of capital (what capital entitles a person to do under our current system) was destroying people’s lives and hope and autonomy.
But Marx and Engels actually dedicated several paragraphs of the Communist Manifesto to explaining why capital should not be destroyed during the overthrow of the bourgeoisie – indicating that they did believe capital to be valuable.
What do you mean by valid input?
Both capital and labor are causally efficacious in production. Why would people use them otherwise? Capital is also the fruits of past labor, so denying capital remuneration denies remuneration to the workers that created that capital @asklemmy
Capitalism is an economic system wherein production is organised in order to produce a massive commodities, which are sold for a profit, which is then reinvested in the production process with the goal of endless growth of the production.
The key here being maximization of profit. It’s the very foundation.
So, first off, let me say that if it’ll help us move toward something better than we have now, even if in my head I call it anarcho-communism, I’ll happily call it “capitalism.”
For reference, there’s an author named Charles Eisenstein who in his book “Sacred Economics” advocates for taking steps that he intends to move us (the world, I guess) eventually to a gift-based economy without money or barter. And he calls it capitalism. With a straight face. Now, I don’t know if deep down in his heart he believes it actually qualifies as capitalism or if he’s calling it capitalism because he feels like his aims are more likely to be well received by pro-capitalists if he calls it “capitalism.”
One can IMO go too far with that. Case in point: ecofascism. But I digress.
On to the definition of capitalism. At least in my head, capitalism is characterized by:
- The profit motive. The incentive to amass. (Typically money, but a barter-based system could well be the same in every way that matters.)
- Quid pro quo. The whole system is based on it.
- Private property. A particular set of rules for who has ownership rights over what.
- The institution of employment.
My answer didn’t include the word “capital”, so I’ll skip that second question.
As to your third question, let me take exception with the question itself. I don’t believe “control over what you produce” is necesssarily a good thing per se. I believe in having something roughly like ownership rights over what one uses. But if one produce a surplus, I don’t believe they should be able to deprive others in need of said surplus.
I think capitalism coerces people into producing surplus for others to sell for a profit that the producer (employee) doesn’t get a fair share in if that goes more to the spirit of your question.
Bonus questions:
- I… don’t know or care? “Capitalist” can mean someone who supports the institution of capitalism. Or it can mean something like an owner of a company that employs people. I think plenty of people participate in capitalism (by selling things they make, by accepting an employment position, etc) out of necessity while disapproving of the system as a whole. Hell, I’m one of them. I’m not sure I understand why you ask.
- If I’m the person who sells things I make? Again, anticapitalists participate in capitalism because capitalism doesn’t give them a choice. Does that answer your question?
- The word “sell” here has some baggage I don’t like. I’m not for a system in which anybody “sells” anything. But to answer how one might expand an operation that produces things, worker cooperatives are probably the most obvious answer.
- Anyway, worker cooperatives are owned and run by the workers. Corporations are owned by shareholders and run by boards of directors. Worker cooperatives don’t have incentives and power to fuck their workers over. They do have incentive and power to take care of their workers.
Maybe I should have read the first thread you referenced before answering these. Maybe it would have given more context. But hopefully this response gives you what you were looking for.
Okay, I absolutely love this response. All the way down.
And no, you didn’t need to read o_o’s thread. My personal summary of it is that people who defined capitalism as, “anything that allows individuals control over the fruits of their labor” and people who defined capitalism as, “the alienation of workers from the fruits of their labor” were talking right past each other, not really understanding that the points they were making only supported their argument if you assumed their definitions were correct.
For reference, there’s an author named Charles Eisenstein who in his book “Sacred Economics” advocates for taking steps that he intends to move us (the world, I guess) eventually to a gift-based economy without money or barter. And he calls it capitalism. With a straight face. Now, I don’t know if deep down in his heart he believes it actually qualifies as capitalism or if he’s calling it capitalism because he feels like his aims are more likely to be well received by pro-capitalists if he calls it “capitalism.”
That is amusing. And yeah. That sounds very pragmatic. Or ignorant. Hard to tell which. But Eisenstein sounds like an interesting character. And like you said, if one needs to call their ideal system “capitalism” to get it implemented, then there’s no real crime.
- the profit motive
- quid pro quo
- private property
- the institution of employment
Solid. I like these components.
As to your third question, let me take exception with the question itself. I don’t believe “control over what you produce” is necesssarily a good thing per se. I believe in having something roughly like ownership rights over what one uses. But if one produce a surplus, I don’t believe they should be able to deprive others in need of said surplus.
That fascinates me. I have always heard the struggle phrased essentially as, “you control your proceeds” vs “someone else controls your proceeds.” I didn’t realize people were advocating philosophies that bowed to the idea that “needs” should take priority over personal possessions. I’ll have to think about that one for a while.
- I… don’t know or care? “Capitalist” can mean someone who supports the institution of capitalism. Or it can mean something like an owner of a company that employs people. I think plenty of people participate in capitalism (by selling things they make, by accepting an employment position, etc) out of necessity while disapproving of the system as a whole. Hell, I’m one of them. I’m not sure I understand why you ask.
This answer is wonderful. Again, I like that you acknowledge that the definitions are so varied that they aren’t even useful anymore.
The main reason I asked? It was a leading question: my goal was that people’s answers would highlight the differences between their definitions. Because, if people could understand why their definitions were fundamentally different, maybe they could understand why they were talking past each other?
I’m not sure if the effort will succeed. But I really liked and appreciated this answer.
What is capitalism?
Capitalism is the way we currently organize our society, where a group of people (the ruling class) have ownership over the means of production and, using that, they take the labor value created by the working class. They use their power to control the society, despite democracy, and change its rules to their advantage.
How capitalism strips people of their control over what they produce?
Think about… A factory worker making smartphones. How many they do in a day? How much it does each will cost? How much of it the worker gets? The shareholders that owns the factory will get most of the value as profit, despite the fact that they did not work.
1: No. You made something of value. Capitalists don’t create value.
2: Private property is not the same as Ownership of the means of production. Communism don’t abolish private property, it abolish ownership of the means of production.
3: You can expand your production by working with other people, as expected. In a communist society you would not be their “boss”, and would not get any value from their work for yourself, they will have it.
4: Communism is a way to organize society without exploitation. They may be true for a cooperative, and we need more of that. But the implications of that for the whole society are deeper; democracy may reflect the needs of people better when there are no power disparity between member of the society.
To be fair, the question was “What is Capitalism” you’re mostly answering the question “What is Communism”.
Just on the bonus questions. Lol.
I’ll toss my two cents in
What is capitalism?
Capitalism is a form of economy where individuals are allowed to obtain, keep, and distribute capital as they see fit, so long as they have the means to do so.
What is capital
Capital is a combination of property and money. Property being the things you own, with money being a measure of potential property you don’t yet own.
How does capitalism empower people to own what they produce?
It’s at the core of the concept. Individuals are allowed to obtain, keep, and distribute capital as they see fit. You and you alone own your capital.
I see a lot of comments saying workers are not allowed to own what they produce. That their employer takes it from them. I feel this is flawed and possibly comes from a place of frustration. So let me ask this: What does an employed worker produce?
If that worker is a self employed craftsman making sprockets, the answer’s clear. They produce sprockets. They can then go out and sell those sprockets for goods, services, or money as they see fit.
If that worker is employed by a sprocket making company; they still make sprockets, but that’s not what they produce. They produce labor. Which they’ve chosen to sell to the sprocket company for money and/or other benefits. They may not care about sprockets themselves, don’t go to sprocket conventions, and certainly don’t want to deal with figuring out how to sell all the sprockets they’re making. It’s a better deal to sell your labor and use the profit you make off your employer to do the things that actually interest you. It’s your employer’s job to handle everything else.
Note that selling your labor is no different than selling capital. You set the price you’re willing to accept, and your employers (who are your consumers) can accept that price or not. That doesn’t mean you can set your price at any number and expect it to stick. Just like how the price of sprockets is dependent on consumer need and competitive prices, so is the price of your labor.
Bonus Questions!
Say you are an individual who sells something you create. Are you a capitalist?
If you also exist in a capitalist economy, then yes.
If you are the above person, can you exist in both capitalist society and one in which private property has been abolished?
No. Capitalism cannot exist if you don’t have control over your own property.
Say you create and sell some product regularly (as above), but have more orders than you can fulfill alone. Is there any way to expand your operation and meet demand without using capitalist methods (such as hiring wage workers or selling your recipes / process to local franchisees for a cut of their proceeds, etc)?
Yes. Ideally you raise your prices so fewer people buy your product while you still make the same profit as if you were filling those extra orders. Alternatively, you can work to optimize your production methods to create more product in the same amount of time. Be it finding more efficient methods you can practice to make each product, or creating or purchasing equipment which can make each product faster. The balance between price and optimization is up to you.
Is the distinction between a worker cooperative and a more traditional business important? Why is the distinction important?
It’s a term to describe a type of business. No different than “corporation” or “partnership” or “nonprofit”, among others. The distinction’s important in that there’s value in being able to describe different types of businesses.
I see a lot of comments saying workers are not allowed to own what they produce. That their employer takes it from them. I feel this is flawed and possibly comes from a place of frustration.
That’s not frustration. The viewpoint you are describing (that workers are not allowed to own what they produce) actually comes from a different definition of “capital” and “capitalism” than the one you are using. And that difference in definitions is why I created this post. And I appreciate your answer. It lets me highlight the differences in definitions and the consequences of those differences. Because in the case of capitalism, the difference in definitions are actually more important than any difference in values or priorities.
You noted that people are saying “workers aren’t allowed to own what they produce in capitalism.” But those people are not referring to capitalism as you have defined it.
Capital
Capital is a combination of property and money. Property being the things you own, with money being a measure of potential property you don’t yet own.
I’m sorry, but no one who disagrees with you thinks that the ability to accrue property and money deprive workers of control over what they produce. Not even Marx and Engels. Not even Mao or Stalin. Certainly, property and money can we wielded in such a way that they become capital. But until then, property and money are merely wealth.
The definition used by people like Marx and Engels – or by the entire field of economics – is: capital is property that allows or speeds up the production of goods. A mine. An oil rig. A McDonalds burger conveyor-belt-oven-thingy. A 3D printer. In other words, the word “capital” is about the function of the property. Not its value. A painting can cost $1,000,000 and still not become capital. Because no one will ever operate that painting to cook burgers. Or to mine ores.
Capitalism
Now “the ability to own commodity-producing property” is still not quite sufficient for a system to become “capitalism.” In fact, Marx and Engels didn’t want any capital to be destroyed at all in the overthrow of the bourgeoisie. Because even under the definition of “capital” that communists still to this day believe in, the existence of capital and ownership of it are still not inherently a source of coercion.
There’s another crucial piece to the puzzle that leads to people complaining about the whole system:
In capitalism as a system, some form of employment contract always allows the owner of capital to own everything produced using that capital.
For example, the oil rig owner – according to employment contracts – owns all of the oil produced using the oil rig. But not only did the owner not need to work the rig to extract the oil: the owner also did not need to weld the seams or turn the screws to build the oil rig. All the owner needs is official ownership of the oil rig and a system that acknowledges their right to everything the oil rig produces, (regardless of who needed to input their labor to turn the oil rig into anything other than a metal sculpture in the ocean.) and with those two things, they are entitled to all of the proceeds of the rig.
Now, hopefully, you can see that, provided a worker has entered into such a contract, “workers are not allowed to own what they produce” is not a statement born from frustration: it’s just true by definition. It’s not saying “the worker is NEVER allowed to own anything they ever create in this society.” It’s saying: “within the relationship laid out by the employment contract, the worker who operates capital is not entitled to the direct consequences of their labor.”
Now, whether the worker benefits from this arrangement is another picture, but in accepting an employment contract, the worker is entering into a dynamic where they do not own the outcome of their own labor.
Bonus Question #4
Which is why bonus question #4 (the difference between a workers’ cooperative and a company that uses these employment contracts) is extremely important to understanding the consequences of the difference between these definitions. You even touched on its importance in your earlier replies, saying yourself:
If that worker is employed by a sprocket making company; they still make sprockets, but that’s not what they produce. They produce labor. Which they’ve chosen to sell to the sprocket company for money and/or other benefits
(Aside: what you’re describing here is literally Marx’s theory of alienation.) But more importantly,
I’m assuming the sprocket company “produces” sprockets by your definition of “produce.” Well, in a workers’ co-op, the workers vote in the decisions of the company. They elect the CEO (if there is one) and the managers. They take shares of the profits. They are the company. And if the workers are the company, and the company produces sprockets, then the workers are once again – just like if they were self-employed, but with the benefits of efficiency and networking that come from being part of an organization – producing sprockets. They are no longer (as Marx would say) alienated from the results of their labor.
In other words, the co-op is a form of self-employment according to the definitions you appear to be using. Which makes the distinction between cooperatives and other kinds of companies… massive.
The people saying, “capitalism strips workers of the results of their labor” love workers’ co-ops. Love them. Despite you probably defining the workers’ cooperative as “another example of capitalism”, not even avowed Marxists would in any circumstance suggest that the worker co-op “disallows workers from owning what they produce.” In fact, they strongly believe the opposite. To them (and to Marx himself) the worker cooperative operates under an entire opposing paradigm to the worker contract. And to them, it is therefore a rival philosophy to capitalism.
You don’t have to accept their definitions. You don’t need to believe Marxist definitions are correct. You can believe co-ops are capitalist all you want.
But please: try to understand that when people criticize “capitalism,” they are (I 100% guarantee) referring to something far more narrow and far more specific than what you call capitalism.
I get the sense I’ve touched a nerve here. Though I’m not sure where.
I would like to mention I never suggested the frustration comes from workers not being able to own anything at all. Though I still believe what you said about workers not being entitled to the direct consequences of their labor is flawed. Similar to someone saying “I spend all day pulling oil out of the ground, but I’m not allowed to own any of it”. That’s a fair complaint, and I’d suggest any oil rig worker who wants to get paid in oil should absolutely negotiate for that with their employer. What I was trying to explain is the “direct consequences of their labor” is the compensation they’re paid for providing said labor. You, as a worker, sell your labor for a price, same as any other transaction. If you will, your “sprocket” in this situation is the labor you provide.
What I was trying to explain is the “direct consequences of their labor” is the compensation they’re paid for providing said labor. You, as a worker, sell your labor for a price, same as any other transaction. If you will, your “sprocket” in this situation is the labor you provide.
I get that the worker is not the only reason the sprocket exists. I understand that he uses someone’s else alloy-pouring lava-pitcher to pour molten steel into a sprocket cast someone else owns. Whoever owns those things and consented / instructed for them to be used in the above manner shares responsibility (might even be more responsible) for the creation of that sprocket. But the sprocket still doesn’t exist until the worker poured the alloy.
The fact that the worker then didn’t create a sprocket, or produce a sprocket, or cause a sprocket to exist – is an alienating step only found in certain kinds of businesses. (And those are the only kinds of businesses anti-capitalists dislike).
For example, a worker can walk into a worker co-op, pour the same kind of alloy heated in the same kind of furnace into a cast that is shaped the exact same, but the worker at this co-op (unlike the worker for the private company) has now created a sprocket.
I’m pretty sure you would agree, right? Because he co-owns the company and he had a democratic voice in the acquisition of the company’s tools? He is responsible for all of the things that caused that sprocket to be created. No other factors were more involved than the worker-owner’s contributions and decisions.
So even though the co-op worker did the exact same thing using the exact same kinds of machinery as the private company worker, would you agree that the sprocket (which only existed after he poured the alloy) was a direct consequence of the co-op worker’s actions? (Whereas it was not a direct consequence of the private employee’s actions)
No. Both workers have created a sprocket, which exists as a direct result of their actions
Okay… I’m a bit confused… but I think you are saying the worker in the private company provides – as his main product – labor, even though he’s still directly responsible for the creation of the sprocket that he poured. And that he is rewarded for his labor, which is his primary contribution, even though he receives no direct reward for the creation of the sprocket.
Am I understanding you? Please ignore everything below this if I’m not understanding you.
On the other hand, if I am understanding you correctly, please read on: the worker in the co-op performed the same task. And unlike the private worker, the co-op worker is given a reward for more than just his labor. He’s given a vote in who the sprocket is sold to, a vote in the price set when the sprocket is sold, a vote in the exact mixture of ores going into the sprocket, and (without needing to ask for a raise, without needing to change jobs) the worker in the worker co-op gets a voice in how much he gets paid, what hours he gets scheduled, and how much vacation and sick leave he is allowed.
The worker in the worker co-op gets a voice in general. Agency.
I don’t see how those two things just seem like different flavors of “company” to you. One strips the worker of everything but his labor. The other gives him a voice.
To me, that makes them opposites.
I think this answer misses the mark a little bit with regards to the context of what it is about capitalism that causes so much controversy.
People who critique capitalism aren’t usually advocating for an economic system completely devoid of private ownership (though some are). They’re often raising issue with a certain type of capital ownership.
Say you’re the owner of a sprocket manufacturing corporation, and I’m a worker. You yourself don’t work, you just inherited a sprocket empire from your grandfather, who founded that sprocket empire using funds from selling his emerald mines that were worked by slaves.
I put in an honest days work 5 days a week, and in those 5 days, I produce $2000 worth of sprockets. It costs $10 per week to maintain the sprocket machines, $10 per week for electrical power to cover my sprocket making activities, $30 per week to repay the loan that was taken to build the factory, and $50 per week in other miscellaneous expenses needed to allow me to make sprockets.
That means that of the $2000 worth of sprockets I produced, $1900 of profit was generated.
You pay me a salary of $500 per week, and collect $1400 per week from my (and each other laborer’s) work.
The point of criticism is that you’re accumulating wealth, which other people had to work to produce, without doing any work yourself. You’re simply a parasitic freeloader on society because of an arbitrary concept of “ownership” over something that you don’t use personally.
Some responses to these criticisms include the following:
“You should just negotiate for a higher salary, or go work somewhere that’s paying more.”
This is the example from classical economic theory, and there are a whole handful of reasons that it doesn’t work. The voluntary exchange between a worker and a capitalist (meaning one who owns the means of production) isn’t actually (fully) voluntary. A worker who finds his working conditions unsatisfactory can’t reasonably just choose not to work. The threat of financial ruin, homelessness, and starvation act as a metaphorical gun to the head of the laborer giving the capitalist a significant negotiating advantage.
Add to this the fact that it’s been theorized and demonstrated that capitalism tends toward regulatory capture and monopoly, and you have a situation where the means of production become more and more concentrated in the hands of a group of elites, while the workers’ bargenaining power becomes weaker and weaker due to less competition in the labor market.
“The capitalist deserves the profits that they extract because of [this work that they’ve done]”
If the owner of the factory is functioning as a floor manager, they should be paid a fair salary for being a floor manager. If they’re working as a director, they are entitled to a director’s salary. These critiques of capitalism aren’t saying that there should be no hierarchy in an enterprise (though some alternatives to capitalism do call for that). Just that the only people who are entitled to the wealth from something that’s produced are those who are working to produce it.
This same thing goes for other forms of capital ownership too, by the way. Landlords are a classical example. I’ve heard it claimed that landlords are entitled to their rents because many of them work so hard at repairs and managing their properties. They’re totally entitled to be compensated for any labor they engage in, but the wealth that they extract from tenants far exceeds the value of the labor that they supply. Which is kind of the whole point of rental property, if “investors” couldn’t extract a passive income (income in excess of work performed), they wouldn’t be buying homes and then renting them out.
I think you’ve written a good, neutral summary critique that increases our common ability to debate this. Thank you.
I would argue, however, that your example makes it sound especially egregious as the profit margin in your example is 95%. The advantage of capitalism, according the people who support it (like I do), is that other sprocket making companies exist and together they bring the profit margins down and down and down (due to competition), forcing continual innovation to bring it back up. Thus, not only is the profit margins typically much, much smaller (1-10%), but society collectively advances, which benefits the workers too as the produce they need to acquire increases in quality and lowers in price.
The truth is probably somewhere in the middle.
So I agree with you when arguing against monopolies.
This is a really good point, and I’m glad that someone who’s got a decent understanding of basic economics is replying to me.
The 95% profit margin was definitely to make a point, as you pointed out. And as you said, according to conventional thinking on capitalism, market forces should push that down to a fair equilibrium.
I think that the issue I was hinting at is that there is a fair amount of contemporary thinking that provides pretty convincing arguments that the nature of capitalism necessarily tends towards consolidation and monopoly over time. The classical model of a baker charging too much on an island, so someone else opens a bakery, doesn’t really work too well when we’re talking about telecom companies and media conglomerates. Once a high-tech segment has consolidated enough, it becomes impossible for anyone other than large companies to enter the market. And when those large companies are actually owned by a larger parent company, we start to see the failures of the classical market forces to produce a ‘fair’ equilibrium due to monopolization.
We definitely aren’t at the point of total failure yet, but in my opinion the trend line isn’t hard to spot. And I think the bigger issue is that due to regulatory capture, there’s not much we can do to patch the sinking ship.
Oh, I agree there’s plenty of pros and cons to talk about regarding a capitalist economy. There’s also plenty to talk about regarding the form capitalism has taken in our global and local economies. However, that’s for the other discussion OP mentioned. This one is only about defining what capitalism is.
To that end, and in regards to your critique about parasitic owners living off the labor of workers, I’d like to pose another question: Does a capitalist system require workers and employers?
I would say no. It’s entirely feasible for everyone in a capitalist society to produce and trade their own sprockets. It would be up to each individual to either inherit a given trade from someone who’s retiring, or else find something society needs that they can fulfil. Our current use of capitalism may largely contain organized businesses built on employer/worker relationships, but that’s not a defining trait of the system.
The cost and price of sprockets is also not a defining trait of capitalism. You’re free to set your own price on any sprocket you own. You could ask for a handful of dirt as payment, or you could ask for the literal moon. Is the moon a fair price for your sprocket? That’s debatable, and largely decided by your consumers
Of course the market forces that are naturally present in a purely capitalist economy require there to be workers and employers.
In the scenario that you described, are you suggesting that instead of 10,000 people working at TSMC, we’d have 10,000 semiconductor factories that are built, operated, maintained, cleaned, and supplied by 10,000 individual people?
We can use an even simpler scenario. I believe that you’re suggesting that instead of the way that the food service sector currently works, it would instead be possible under capitalism for all food-service workers to individually sell served food to customers, presumably from their own kitchens.
In that scenario, what happens when Bob McDonald offers 10 of his friends to come work in his kitchen for an hourly wage, and they’re able to produce better food (due to specialization) for a lower price (due to lower overhead per worker)? Bob (and the countless other people who will undoubtedly copy his success) will outcompete the slower, more expensive kitchens. Individually owned and operated kitchens will be driven out of business. Then small, 10-person kitchens will start to struggle against larger kitchens and chain kitchens that have been able to spread the costs over multiple locations.
Before long, it will be impossible for a Sally Jones to open and run her own kitchen alone. In order to just break even, Sally’s prices would be significantly higher than the food sold at Bob McDonald’s chain. The cost of her premises will be higher relative to the amount of food she can produce on her own, the cost of the ingredients themselves will be higher because of bulk purchase prices vs retail, the cost of preparing the food will be higher because she doesn’t have access to an industrial onion chopper that can peel and chop a 50lb bag of onions in 30 seconds.
Market forces make it impossible for an individual to compete, due to the economies of scale. This is the same reason that over time, corporations under capitalism merge and restructure as they tend toward a monopoly.
I might be totally misunderstanding what you’re suggesting. If what you meant was that instead of the 10,000 TSMC workers each having their own chip foundries, that they’d all still work at the same factory, but that they’d have collectively funded and built the factory, and that they each individually work for themselves at the factory and share in the money they get from selling chips, then I’d agree that that’s an awesome system. It’s still not really possible under capitalism, because if that’s what you’re describing, it is actually called socialism.
I know I am doing your homework here
The reason I am posting this anyway is that I hope you’ll learn something from it. Please read it and try to understand it.
The first thing to say here is that capitalism/communism is not a binary thing at all, even though many people (especially from the US) seem to believe.
Instead, there is a whole spectrum between pure capitalism and pure communism. In fact, there has never been any large-scale real-world implementation of either pure capitalism or pure communism.
But let’s start with definitions.
Pure capitalism
In a pure capitalistic system, the state basically doesn’t exist. This is often called anarchocapitalism, because for pure capitalism to exist, you also need an absence of government => anarchism.
In such a system there is no regulation, no taxes, none of the basic services are provided by a government. Instead, money is king. In pure capitalism money doesn’t equal power, it is the only power. There is only a completely free market as the only mechanism that is supposed to balance anything out.
Pure communism
In a pure communist system, there is no private sector and even no private property. The whole power lies solely with the state, money has no meaning. For the state to be able to really govern everything that a capitalist system does with money, it pretty much needs full control over everything.
Why can pure capitalism not work?
In a pure capitalist system, if you have more money, you have more power, which makes it easier to gain more money, and with more money comes more power and so on. Without any regulation the free market is unstable and tends towards monopolies. Basically, once you gain an advantage over your competitors, you can use your money to suppress or buy out your competitors until there are none left. If anyone tries to enter your market segment, you just buy them out or e.g. buy their suppliers. (Google Standard Oil for a good example.)
So for the free market to work, you need to have regulation.
The other side here is that in a completely free market, employers have ample options to exploit their employees. Until they band together, strike/revolt/start a revolution, and make sure that the free market isn’t as free any more, meaning that they get treated fairly and get a bigger share.
Why does pure communism not work?
Well, even the Sowjet Union wasn’t a pure communistic system. There is some level of personal property that people need to have as an incentive to work. If it doesn’t matter what you do at work and you always get the same reward, no matter whether you even show up for work, then your system will also fall apart.
What exists between capitalism and communism?
There’s a massive spectrum in between. There are countries that are quite capitalist, like the US. Here you have a mostly capitalist system, but basic services are still provided by the state.
There is social market economy, like many European countries are using. Here you have state-owned companies in all important sectors, that have to compete with private companies. More than just the basic needs are covered by the state.
And then you have something like the UDSSR, which is mostly communist, but you are still allowed to have some private property.
Back to your questions: Since your answer above likely included the word “capital”, what is capital?
Capital is any kind of property belonging to persons, that can be used to influence the behaviour of others by trading. Money, companies, stocks, real estate, basically anything that can be sold. Depending on the specific system, even humans.
How does capitalism empower people to own what they produce? Or, how does capitalism strip people of their control over what they produce?
The question really misses the point. If you have the capital, it the product will belong to you. If you don’t, it won’t.
Say you are an individual who sells something you create. Are you a capitalist?
Again, misses the point. If you are a slave who produces something and then has the task to sell it for your master, you definitely aren’t a capitalist.
If you are the master, who doesn’t produce and doesn’t sell, but earn from the work of others, then you are a capitalist.
If you are the above person, can you exist in both capitalist society and one in which private property has been abolished?
False dichotomy. Neither a pure capitalst nor a pure communist society exists.
Say you create and sell some product regularly (as above), but have more orders than you can fulfill alone. Is there any way to expand your operation and meet demand without using capitalist methods (such as hiring wage workers or selling your recipes / process to local franchisees for a cut of their proceeds, etc)?
Again, false dichotomy. Cooperation also exists in a communist-oriented (or even a theoretical pure communist) system.
And actually, even in a capitalist-oriented system you don’t have to use any of these methods. You can just cooperate with others on a same level. E.g. I build X to sell. I could ask someone to join and that person could run their own business side-by-side doing the same thing. We wouldn’t need to have a business partnership at all. Both independently build and sell. Of course, that would mean that I’d have no control over the other guy and I don’t earn money from their work. But there’s no law telling me I have to.
Is the distinction between a worker cooperative and a more traditional business important? Why is the distinction important?
Yes, google it yourself.___
I think your misundertand the concept of private property and communism. Which could be skewing your opinion on the matter
In pure communism, there is no private or personal property.
But there has never been any purely communist society of significant size or duration, specifically for this issue. There have been a few short-lived small-scale experiments, like e.g. the “United Order” the Church of Jesus Christ tried to implement in the 1830s among it’s members, but even with this being a voluntary thing among a religiously motivated group it didn’t even last a year.
I have to agree with @arvere@lemmy.ml, you aren’t working with an accurate definition of communism. You said pure communism revolves around the state which is explicitly false. Pure communism is, by definition, moneyless, classless, and stateless. Historically, there have been state-socialists who believe that sort of system can provide a viable alternative to grassroots revolution in transitioning from a capitalist to a communist society. However, pure communism is anarchic, there is no state. Cooperation is spontaneous.
Additionally, it does not preclude personal property: items an individual keeps for personal use, e.g. your house, your car, your TV. What it does preclude is private property: items an individual keeps to charge others for their use, e.g. a rental property, a taxi, a movie theater.
Respectfully, you might want to brush up on your communist theory.
I might have simplified, but the points remain exactly the same.
If the system (Question, who is the system?) precludes (Question, who precludes?) from renting property (Question, who determines what what renting is?), there needs to be a system in place that needs to enforce all that.
Otherwise you aren’t talking about communism, you are talking about anarchism. Anarchism has no inherent link to communism, so if communism is supposed to exist at all, it needs a government. There is no way around it.
If we go by your distinction between personal and private property, what is to stop anyone from renting out their personal property? If I have the coolest movie projector in the community, what is stopping me from charging for access in an anarchist society? If I have more, I can make more and then I’m a capitalist again.
But explaining one impossible construct (pure communism) with another impossible construct (anarchism) doesn’t make the first one more probable.
Anarchism is inherently a non-stable system. You have natural power imbalances and anarchism has no mechanisms to balance them out. An anarchist society where no democratic processes are used leads directly to mafia-like organisations taking control.
Anarchism is based on the idea that a power vacuum is sustainable.
Anarchism has no inherent link to communism
Where did you get that idea? Anarchism is explicitly a left-wing political ideology that emerged from general socialist thought. The two are intimately linked in their development, and heavily influenced one another with the “purest” form of either by their own principles independently culminating in anarcho-communism. You can debate the viability of this system all you like, but the definition of the term is what it is.
It is defined as implicitly free of hierarchies, including the state. If you want to talk about a system with a state, you’re no longer taking about communism. We can talk about pragmatic incarnations of socialist policy, we can talk about the conditions necessary to foster a communist society, we can talk about the consequences of either. But if the subject is the definition of communism, none of that is relevant.
If we go by your distinction between personal and private property, what is to stop anyone from renting out their personal property?
A lack of money for one. The existence of other cool projectors, if you didn’t build the cool projector by yourself, that can be communally held. If you built it yourself, and decide to hoarde it yourself, presumably other members of the community would hesitate to share their cool stuff with you. Patents and IP are private property, so anyone with skill in projector-making can try to copy it.
If you recognize the benefit of sharing your cool stuff in exchange for others sharing their cool stuff with you, everyone gets to use lots of cool stuff. If you hoarde the cool stuff you personally invented, no one will let you use the cool stuff they personally invented, and you’ll only get to use the cool things you personally invented.
Have you never heard of anarchocapitalism?
I’ve also heard of vegan milk.
As others have pointed out, it’s an oxymoronic misnomer used by right-wing “libertarian” neo-feudalists. The hierarchy inherent to capitalism is fundamentally incompatible with anarchism.
I believe they might have the etymology in common - probably because the word anarchism became sort of a synonym for any type of “chaos”, but anarchism as a political movement is widely known as an extreme left-winged ideology! Which is explicitly against all forms of institution, specially corporations
Hot take, but it’s mostly a buzzword at this point. It more productive to talk about wealth distribution and the structure of industry directly, and in which ways they can be good or bad.
Capitalism has 3 main features:
- Private property (even in land)
- Employer-employee relationships
- MarketsCapitalism is misnamed. Early theorists mistakenly identified capital ownership as the root feature that gave the employer the right to the whole product that workers produce. The employment contract gives the employer the right to the whole product of the firm. Coops correct this. Power leads to employers typically being capital owners, which is why the misnomer stuck. @asklemmy
It took me all day to understand this one, but that is an excellent point. We do mislabel the problem. Those employment contracts are indeed far more damaging than capital itself. Thank you for this perspective.
I would recommend reading David Ellerman to get more of this perspective. Here is a link to a text where he argues that the employment contract is illiberal, which means that it violates liberalism’s fundamental principles, and the only kind of economy that is compatible with liberalism is an economic democracy where all firms are democratic: https://www.ellerman.org/wp-content/uploads/2020/03/Article-from-ReclaimingLiberalismEbook.pdf
Capitalism is a socioeconomic system in which private individuals (capitalists) own the means of production and employ others to work them. The employer exploits the employed through wage labor, a system in which the surplus value of a laborer is taken as profit for the capitalist. Capitalism is often characterized by market relations and generalized commodity production, but there are always exceptions as in any system.
I think your first point is the most important: it’s a system in which those who own the means of production, those who benefit the most from production, produce nothing.
But they do have the means to produce, so without them the laborers cannot produce on the same level. It should be a mutual relationship that everyone involved should benefit. I think when others say that capitalism is bad, they’re referencing the corrupted form of capitalism we have today. A sort of pseudo slavery where corporations and those in power merely gives laborers just enough to survive but not enough to thrive.
That’s capitalism’s end goal, though, is slavery. Really it’s just feudalism with extra steps.
