"Capitalism is not a simple synonym for market. If I said “I’m going to the supercapitalism to buy some apples” you would think I was nuts. If I said “I thought there was a capitalism for pink bunnies, so I opened a pink bunny store” I would sound stupid. "
I never said that market was a synonym for capitalism. I said that it was one thing that has existed along with the division of labor and some semblance of property in the past.
It’s called The Phoenicians and the West by Maria-Eugenia Aubet from the Universidad Autonoma of Barcelona.
This is one of the greatest history books of all time. The Phoenician civilization is vastly understudied
Anarchism is not the same as capitalism. It took me a longtime to get that, but I finally got it. ‘Anarchism’ is a meaningless blanket term. ‘The state’ has no independent existence. It can only exist in a context of property rights. Thus, only ‘anarcho-capitalism’ is a meaningful term, but that too must be revised.
As for capitalism being natural, do you charge rents to your kids? If a friend asks for five bucks, do you ask him for interest afterwards? Do you charge your dates for the drive home? Do you even pay your dates for sexual favors?
Not a single transaction if your inner circle is capitalistic. As Hayek notes, capitalism was only born when relations extended beyond one’s “Dumbar circle”, very, very late in human history (I’d even say as late as in the Dutch Republic) . That’s why people are so naturally inclined to socialism: it’s what their inner circle, and most of our evolved culture and indeed genes, ares build upon.
I didn’t say anarchism was capitalism did I? I might charge rent to someone that needed a place to stay for the night or ask them to do some chores or something. Relations have extended beyond the Dumbar circle, if by that you mean simple family and friend relations, for thousands of years. Could you elaborate on the Dumbar circle? I can’t find anything on it. I find it telling that capitalistic inclinations have always been present in human society, and necessary, when you have Roman emperors trying to impose price controls and wage controls or when you have people producing silk or other goods to take to market.
An interesting point from this wikipedia page http://en.wikipedia.org/wiki/Informal_economy to think about is this, “Governments have tried to regulate (formalize) aspects of their economies for as long as surplus wealth has existed which is at least as early as Sumer. Yet no such regulation has ever been wholly enforceable. Archaeological and anthropological evidence strongly suggests that people of all societies regularly adjust their activity within economic systems in attempt to evade regulations. Therefore, if informal economic activity is that which goes unregulated in an otherwise regulated system then informal economies are as old as their formal counterparts, if not older.”
Just read this now in Phoenicians and the West, “What is more, it is now on record that, in Mesopotamia, market and price fluctuations coexisted with systems of redistribution and reciprocity from the end of the fourth millenium BC.” -pg. 84
Let me make it clear that I am not saying that capitalism was invented in the XVI century. As long as there is one city, there must be a market, however limited. So as long as there has been civilization, there has been a modicum of trade and market. But we’ve had civilization for a mere 8000 years against the tens of thousands of evolution for homo sapiens. 8000 years are nothing at all for evolution. So, we’re still genetically geared to function in small circles.
Now, Dunbar’s number is the number of people you can meaningfully know and retain personal contacts with at any time: family, friends and coworkers. It hangs around 120-150. Beyond that there is no way you can establish rations in any way bur through the market
So, we have man who must live at the same time in two worlds: his Dumbar circle, which would be destroyed if it was treated by capitalistic means, and the extended, global order (civilization) which collapses if we try to run it as we do with our family. The benefit of having an inner circle is clear, that of having an extended order far less so. You control you inner circle, no one controls civilization. The inner circle is planned, civilization is spontaneous and seemingly capricious and random. Which of these orders will be more readily sacrificed by someone who can’t stand living in two different standards, you assume?
Let history testify to the collapse of the market order. I repeat that as long as we’ve had civilization, there has been such an extension, but civilization is not a continuum. Take some regiuon at random, say the Arabian peninsula. It was peopled by nomadic herdsmen until the eight century, whereupon form it sprang a huge civilization, which again collapsed to be revived only by colonization in the XIX century. So saying that we’ve always had civilization is misleading: we can say that there’s always is some civilization somewhere, but not that every part of the earth is civilized and functioning beyond Dumbar’s at all times.
I must advise Hayek’s The fatal conceit as a very dense and important work detailing his theory of the extended versus internal order. I’m finding that it is changing my conception of many things.
Well… other way around. There can’t really be capitalism without a division of labor, but there can be trade and a division of labor without capitalism. But I do agree with William. It is not controversial to associate trade and the division of labor with the emergence of civilization.
And Merlin is saying the same thing you would read from Hayek or Walter Block or many others. Man’s instincts evolved to favor altruism and solidarity. Capitalist values may be considered natural in the broader sense that they emerged through cultural evolution, but the point is that respect for indirect exchange and the ‘selfishness’ necessary to an extended capitalist order go against our long-standing instincts.
So if i make somthing out of clay, (dig it up, mold it, and fire it) and sell it on the market. Is that not capitalism, with out the division of labor?
Or would be assume that “market” wouldnt exist with out he DoL happening at some point before?
I asked William what he meant by ‘civilisation’ and he said, ‘The division of labour’. So of course, by that definition, it isn’t controversal to associate the division of labour with the emergance of civilisation - because the division of labour is civilisation.
“It is not controversial to associate trade and the division of labor with the emergence of civilization.”
I wont argue with you there. But does this imply that civilization=capitalism? Also, is it necessarily the case that the DoL goes hand-in-hand with trade? I think not.
I do think that ‘capitalism’ is a product of man’s nature, although the market institutions that we take for granted today certainly did not necessarily exist in the past — ‘capitalism’ [the market economy; market coordination forces; et cetera] is in continuous development. When answering the question it’s important to ask what ‘capitalism’ is and represents, otherwise you get more confused responses, such as Merlin’s (although, I’m very perplexed when he writes that capitalism does not reflect on human nature). Capitalism evolves as a result of economizing man, who choses amongst means and ends — rational (economizing) man is a function of human nature.
Man’s instincts evolved to favor altruism and solidarity.
No, it didn’t. Those who favor what they call ‘altruism’ are choosing preferences based on their own ideals, which by definition makes their preference and subsequent actions based on that preference self-serving.
Jonathan-
" When answering the question it’s important to ask what ‘capitalism’ is and represents, otherwise you get more confused responses,
Seriously…
such as Merlin’s (although, I’m very perplexed when he writes that capitalism does not reflect on human nature).
I as well.
“Capitalism evolves as a result of economizing man, who choses amongst means and ends — rational (economizing) man is a function of human nature.”
That’s what I was looking for.
Well, to repeat my point, does anyone here ask for interest when lending money to a friend? As long as there has been a homo sapiens, he has encircled himself with friends and family/clan. The extended order has not existed prior 8000 years.
And does anyone treat his inner circle by market standards? Certainly not. So we have a social structure that was created with man, and an other which emerged very late. These are run on different systems. Now, if we had to choose one of these two systems as man’s natural propensity, which, in our right mind, would be chose?
What part of such reasoning is unfair?
If no part is, we must not be afraid to say that capitalism is struggling to take a hold on man’s nature (implying that it is not built in), and it might even have a long way to go. But evolution is on ‘our’ side, and societies that can accommodate the capitalistic system the best will flourish and transmit their pro-capitalistic culture, while others will be absorbed. It is not a pessimistic scenario at all, but I can no longer bring myself to imagine that man was born capitalist. We made ourselves into capitalist for our own good.
A better question: Do you own what you lend to your friend? If so, that is private ownership. Do you feel good about lending your friend money? If so, you have profitted from the loan.
The charging of interest is certainly not a defining characteristic of capitailism.
Come one guys, I’m not saying that lending money to a fried breaks praxeological laws. But how would your friend feel if you, fully within your rights, denied him a loan? Would he resent it? Of course! Would you feel he has reason to resent you, if he’s been your friend for a long time and you have the money he needs? Sure. Now do you think that client can rightfully resent a bank that denies them a loan? Do you think capitalism could flourish under such conditions? You see, its no the same standard we apply.
And to drive the point further: do you believe that tribal societies knew such a thing as private property? Find me a single, and I mean one single instance of private property in tribalism and I take back everything I’ve written here. You wont. Private property too is a late development.
You would resent you friend if he didn’t lend you money? Seriously?
I have a different relationship with my friends than I do with my bank. Don’t you? That property is privately owned has nothing to do with the difference.
Around 1000 BC, rules to live by were carved into a couple of tablets by a Jewish guy who was a member of tribe wandering through the desert. Among those rules, roughly translated:
You shall not kill, You shall not steal, You shall not covet anything that belongs to your neighbor.
Well, to repeat my point, does anyone here ask for interest when lending money to a friend?
Capitalism and the market is a product of economizing man, not profit-seeking man. The former does not necessarily imply the latter, even if many individuals do see profits as one of the ends they’d like to attain. So, whether you would ask for interest when lending to a friend, or charge your children for your parenting, is frankly speaking, completely irrelevant.
What part of such reasoning is unfair?
It inaccurately suggests that these are what we define a market economy and capitalism by. By the way, since all these catallactic forces are a product of economizing man, they are necessarily a product of human action which reflects human nature.
It is not a pessimistic scenario at all, but I can no longer bring myself to imagine that man was born capitalist. We made ourselves into capitalist for our own good.
You’re abstracting the concept innaccurately. Man wasn’t originally born into a society with the economic institutions which exist today, but that these institutions didn’t exist sometime in the past doesn’t mean that man wasn’t born ‘capitalistic’. These institutions were developed over time as a result of rational, economizing man, not some unnatural process of market development.
You would resent you friend if he didn’t lend you money? Seriously?
If I was losing my house to the bank for a couple of grands which I would receive within a month, he had the money sitting around and didn’t give it to me? Would you not resent him, seriously?
I have a different relationship with my friends than I do with my bank. Don’t you? That property is privately owned has nothing to do with the difference.
See, we agree. The problem is that, while you can clearly ‘handle’ having different relation, most people cannot, and would like to be treated by the bank as they would by a friend. Do not take your easiness on this matetr lightly, forits appearently a matter of greta uneasiness fopr most people.
Around 1000 BC, rules to live by were carved into a couple of tablets by a Jewish guy who was a member of tribe wandering through the desert. Among those rules, roughly translated:
You shall not kill, You shall not steal, You shall not covet anything that belongs to your neighbor.
And when he ordered the very same folks not to melt the jewels they had into whatever form they liked, on pain of great punishment, was this included in his private property inspiration?
But even taking his words at face value, if you shall not covet other people’s stuff, it means that you cannot exchange, which was indeed the case for most societies back then. The few things that where yours where yours forever, and you could not exchange them. Heck, they even buried you with your stuff!
So, covet whatever you like but do not steal, this would be private property. Do not covet other people’s stuff would seem some Buddhist acetic and/or caste system stuff.
Look, I’d like for an idyllic private property society to have existed in the past. The simple fact is that it didn’t, and it still doesn’t. But again, if you can find any counterexample, real ones please, I’ll take everything back.
@ Jonathan
Let me refine my temrs: capitalism is not unnatural. It just is not built in, but has emerged naturally though the pains of trial and error and societal competition. It did not emerge rationally, because folks sat down and thought the most rational way to solve scarcity.
In the Japan thread some time ago someone mentioned how Japanese groceries where reluctant to raise prices for very scarce goods due to social considerations, causing those goods to be in very, very short supply. There we have it, in the XXI century, in one of the richest societies on earth, people that trade for a living do not find the rational solution to the scarcity problem en masse. Did savages and herdsmen find it? No, but those who stumbled on some private property concept transmitter their culture, and the others didn’t.
Let me refine my temrs: capitalism is not unnatural. It just is not built in, but has emerged naturally though the pains of trial and error and societal competition. It did not emerge rationally, because folks sat down and thought the most rational way to solve scarcity.
Well, it emerged rationally in the sense that all human action is rational. The society we live in today was not built in a day, but it was built step-by-step over a long period of time. Anyways, to assume that our society today was ‘built-in’ is to assume that there is no such thing as human progress, so any such assumption would be absurd. However, the basic tenet of capitalism – economizing, rational man – has existed since at least the first homo sapien, if not sooner.
No, but those who stumbled on some private property concept transmitter their culture, and the others didn’t.
It’s true that private property ‘rights’ have evolved to different degrees in different societies (although, I’m not sure what an unwillingness to raise prices has to do with private property rights – it has to do with some moralistic consideration, which as I wrote before is also a byproduct of economizing, rational man [it’s ultimately self-serving]), but all societies have had private property to one degree or another. How can you eat if someone is objecting to your ownership of that food? Even socialistic wealth redistribution policies have an underlying degree of respect for private property, since it’s assumed that the person who receives the redistributed wealth is now the owner. The same is true for a purely communist society, where goods are distributed according to one’s needs – upon receiving the goods in question you are the owner, until you consume them or they’re taken away from you.
Without property rights – at a very basic level – human life would be impossible. Property rights aren’t some artificial construct someone thought up one day and decided to impliment. Property rights developed naturally through the means-end framework of rational economization.