Why is capitalism thought of as slavery/satism?

What is this “that definition” crap? We all know what capitalism is. Carson and his ilk play semantic word games to suck up to the socialist left.

The very fact he perpetuates two conflicting definitions indicts him. Anarcho-capitalists don’t have a conflict. That’s a manufactured schism by the anti-capitalists. Just like you throwing out “vulgar libertarianism”, more manufactured schism by Carson.

I can’t get down with Carson. I think he’s an ass, and I think his approach and direction leads to violence, which I do not condone, and I do not think will work. At the end of every revolution, the state returns, and so-called leaders like Carson end up face down in a ditch, betrayed by the people they built up. Also known as “useful idiots”.

We need something different. We need solutions, not ideologues who want to repeat the failures of the past, convinced that their own greatness of vision and message will provide a different result.

The whole left-libertarian paradigm is so much crap. You’re either libertarian or you are not. People like Carson have to make distinctions, because that is the only way they can attract a following. Divvy up the herd, and look for a group of followers to build a base from. Petit tyrants, masquerading as populist heroes.

Well, I can’t speak for Communists or any other sort of statist as to the particulars of their resistance to Capitalism, but I can tell you my interpretation, as someone who leans heavily Mutualist, of anti-Capitalist reasoning.

Capital, in the case of factory-type capital, is not something that can be actually totally utilized by an individual, aka the Capitalist, that takes ownership of it. Instead, if they want to get full use out of its capacity, they pay a wage to workers to do it for them. The profits made thereby are the difference between the price the good is sold for and the costs of the labor, materials, and maintenance of the capital needed to produce it.

This can be seen in two ways. By those who support capitalism, it is seen as simply the Capitalist purchasing labor from workers. For the anti-Capitalist, this perspective ignores the true nature of the relationship. Rather than the Capitalist purchasing labor, it could be said that he is renting or loaning out the equipment for a portion of the product made therefrom. The Devil is in the details.

It is important to note, at this point, that the arguments raised by anti-capitalists apply mostly to factory-type production, the Capitalism of the industrial age. In many Western nations, we have moved (artificially and foolishly) away from actually producing anything of value, and the current situation is muddier. That being said, after some real pain from difficult changes, we will return to a more production-based (rather than merely finance- and service-based) economy, and these arguments will come back to the fore.

Continuing now with the infernal details, it turns out that, while Capitalists have never promised equality of outcome, they have mollified the masses with promises for equality of opportunity, or failing that at least some opportunity for everyone to improve their lot in life, and maybe even become wealthy. The truth of the situation is, alas, far less rosy. What has instead come about is the arising of a largely hereditary class system, seperated into the Capitalist Class and the Working Class, with definite and deliberate barriers in between.

The Capitalist Class tends to be better-educated, which helps cement their positions, but even so, the system is hardly meritocratic. It is simple fact that one who begins with wealth has a far easier time accumulating more wealth than one who begins with poverty. The members of the Capitalist Class, further, find it in many ways in their best interest to keep the wages they pay as close to subsistence level as possible. This has the immediate advantage of maximizing profits, but long-term it also prevents the worker from being able to accumulate enough to purchase their own equipment and become a competitor with their former employer.

Even this is not quite enough to condemn the system. If the great factories and division into classes are truly what result from a free market, AKA human interactions without coercion, it would be difficult to argue for altering this result. And indeed, this is just how many Anarcho-Capitalists, Objectivists, etc. see things coming about. It is this conception, claimed by many arch-Capitalists, which the anti-Capitalist looks at and therefore concludes that Capitalism is evil and ignorant.

This is because in a rational examination of the nature of industry and indeed ownership itself, we can see that Capitalism, in the sense of a system seperated into groups who make money by virtue of ownership and groups who make money by virtue of work, is unsustainable without the coercive arm of the state and enforced definitions of ownership derived therefrom.

It is easy enough to cover the difficulties the current system of centralized, massive production would face without socialized transportation (roads and rails built through eminent domain and funded through taxation), special trade deals with despots and tyrants for exclusive or semi-exclusive access to fuel and other raw materials, and massive government programs to absorb production overruns. Nor have massive corporations shown any ability to survive long-term without repeated bailouts from their governments, funded, of course, either through taxation or inflation.

This is because huge businesses are ponderous and inefficient things. The larger a business becomes, the more layers of bureaucracy (read: highly paid non-productive workers) are required, and its actions become less well-coordinated. Like a large state or empire, eventually a corporation grows so large that collapse is inevitable, its own bulk and clumsiness rendering all profits illusiory, a mere trick of bookeeping to satisfy blissfully ignorant shareholders. Of course, without the interference of the government, a business would fall to smaller, more efficient competitors long before it collapsed on its own.

In short, small efficient, localized production, largely by workers who were also owners of their small-scale capital, would outperform and outlast larger, bulkier competitors without the controls and aids put in place to encourage larger organizations to form. There would many different businesses, such that they would have to compete for what workers were available far more than the giant, centralized corporations of today do, and thus pay them far closer to the actual value of their production. Indeed, this process would eventually result in the end of profit, as any profits taken would make one less able to compete for workers. In the end, any business with employees would have to pay managers and workers the full value of their work, with only the costs of maintenance and materials excluded, and so would have no profits at all. The value of being a mere owner would disappear.

Even insofar as larger scales of production persisted, organized labor would end the profit system. While laws today force union recognition on companies, they also tie the hands of organized labor, converting it into a de facto apparatus of the Capitalist profit system. Laws force union recognition, but ban general strikes, disallow anyone labeled “manager” from joining, and prevent people in particularly sensitive industries from striking at all. In the office I work in, there are two “managers” who manage absolutely no one, and one “Director” (read: grand high muckety-muck) with a similar level of responsibility. It’s a joke.

The general strike was once a devastating tool of organized labor that could bring the Capitalist profit system to its knees. One factory or one part of an industry going on strike can be compensated for with scabs, but when every step of production, not just the one factory but their supplier and their distributor, all go on strike at the same time, there is just no way to compensate. The Capitalist either has to sacrifice all or part of his profits to get production going, or close down, leaving the capital unused, and will probably have to sell it at a considerable loss. And the best part is, for such a strike to work requires no force at all, but only coordination and determination.

To sum up, the Capitalist system is seen as evil because inherent to it, according to its proponents, are aspects sustainable only through controlled markets, AKA force. I have tried to demonstrate here that profits via wage-earning labor is impossible without force and injustice. I imagine most of you will think I failed, if you have even bothered to read through this slightly scattered and quite long-winded rant o’mine, but I wanted to put it out there.

JC, great post. I’m not sure I agree (read it twice and still don’t feel I am firmly grasping it).

In particular, these two closing statements … Could you clarify?

Who are we talking about? Corporatists or capitalists? I think you understand the definition of capitalism I normally employ, and thus the distinction from a corporatist.

I don’t know that you have made the point in your first sentence, although I would like to understand it and the reasoning.

I find a lot of people who complain about capitalism, are not capitalists. Not corporatists, but people who have been unsuccessful at generating profit from activity, whether it is the organization of labour, planning, development or the deployment of capital goods.

The socialist/mutualist class tend to be artists, artisans students, and working stiffs. I don’t know if this is a product of my own biased observation. I tend to believe that since there are very few business people (small business people) who are pro-union, pro-socialism, that these are class distinctions. But not capital vs. labour, but success vs. failure. And most small business people, have at last as much human capital, as they do property. They are usually skilled in the field they seek to profit from.

I say that because, I started with nothing. And now I feel like in the material sense, I have a lot of capital. And all of it purchased/accumulated by the sale of my labour, and the conservative management of my finances.

As an aside, I can’t stand your new avatar JC. What is it?

Right. I don’t deny that this is the case. What I’m arguing is not, essentially, about the justice or injustice of your level of wealth, but against the idea that, merely by its ownership, that you would be able to generate a profit for yourself in a truly free market. It seems to me that profit by virtue of ownership of capital is essential to capitalism, and I’m saying that such profits are impossible, at least in the longer term, when markets are not controlled in one way or another.

It is ME, in my costume from this last Halloween. I’m quite proud of it. F-ing scary clown I make, eh?

By no profits, do you mean that if I invested 1,000 ounces of gold into starting business, I would get back 1,000 ounces? Or would I get it at the equilibrium interest rate, for example, I invest 1,000 ounces of gold, the equilibrium interest rate is 5% per year, I get back 1,050 ounces in a year. This sounds like the ERE. Note that there is always uncertainty in the market, so there are still profit-making opportunities in the free market for the lucky entreprenuer.

Yes, pretty much, if that’s all you contributed. See, you have 1,000 ounces to invest in starting a business, but in a free business environment, we would have to assume that there would be others with equivalent capital to invest. You would be competing for limited labor resources with them. The person offering the highest compensation would win the most/best employees, and the upper limit on this offering is the value generated by their labor. Labor costs would be constantly pushed towards this amount.

It is not that capital will avail you nothing. If you own a sewing machine and actually sew with it, you keep the value of the sewing machine and gain the value of what you produce. In the case of your gold, if you make electrical connectors with it, you can get more for the gold than the value of the gold as a mere mineral. It is basically restating the labor theory of value with a free-market twist. You can make money from capital, but only the value you, yourself add to the capital before it or its product is sold. Any value you do not add yourself will have to be fully or almost fully paid to the one that did add it. This does not mean that wage labor will end. You may own something, but be unable to do all the work yourself to make a sellable product from it. In that case, you will pay your employees wage for what he/she produces, and your wage for what you produce, and keep the value of the capital.

Am I getting any more clear here?

Ok, so the main rent that people get is from labor, including the labor that the business owner puts into making the final product, and people keep the value of their capital, after it has been used to produce the final goods. You forgot to mention land, but I assume that the land will have rent in this society, and the landowner will recieve goods for selling his land, is this a good assumption?

However, I feel this directly contradicts with Rothbard’s conclusion about the hypothetical Evenly Rotating Economy that you describe, where there are no profits.

"Remains

(

a) interest on capital invested (uniform in ERE)

(

b) wages of management, when owner is self

employed (set according to DMVP)

(

c) rents of ownership-decision (set according

to DMVP)

Does not remain

(

d) entrepreneurial profit or loss"

I would look at a.

Disturbing on a lot of levels. [:)]

I still don’t understand. Like, I believe these ideas need to function on all levels in order to be a principle. Like I own a couple laptops. Those are capital goods, they allow me to do mobile computing, which is higher order labour, and thus allows me to do more profitable labour.

Sure, there is nothing automatic about the profit, or the labour. But I can’t do mobile computing without the appropriate capital goods (like I couldn’t run an interstellar hotel without a space station).

Any entrepreneur, the so-called petit bourgeoisie will tell you that capital, and opportunity, still aren’t enough to profit. You also have to be smart, lucky, dedicated etc.

The notion that capital alone creates profit, isn’t one held by business, but I can see how the people on the outside looking in, might develop that perception. Of course, for all of the failings of our modern society, people can still accumulate capital, and thrive based upon deploying it properly.

Very good post. That’s probably the best short explanation of the mutualist theory of economic structure that I have ever seen. On a side note, what do you think of automation and self-replicating machinery replacing the service economy, instead of a swing back to a production-based economy?

He doesn’t perpetuate 2 definitions. He uses one, the historical one, because it makes more sense. The use of capitalism to mean “free-market” is a neologism; it didn’t emerge until Rand and then Rothbard used it in that sense.

And when you use “anti-captialists”, do you mean opposition to the current system, or oppostition to free markets?

Huh? You do realize that mutualists are “gradualists” (somewhat different meaning than that used in right-libertarianism) that advocate the building of alternative institutions instead of revolutionary violence. Have you actually read anything by Proudhon, Tucker, or Carson?

Dualisms are very rare in real life.

I fail to see how any of that applies to Carson. Or to any left-libertarian, for that matter.

My point exactly.

Yeah, I have. Carson, and recently Long, have been very clever in not endorsing violence, without condemning it either. Anyone who understands rhetoric understands the game that is being played. Carson’s notion that there is no difference between a fortune 500 company and the state is nonsense.

Of course you don’t see it. If you could see it, you would reject it.

I wonder why the leftists don’t put anarchism under the same scrutiny.

Right. This is precisely the function capital would still serve in the free market: enabling the addition of value to raw materials through labor.

Capital may not be enough to profit if you don’t get people laboring in them, that is certainly true. Your factory can’t just sit there. But, the fact remains that if you own a factory, currently you can hire a manager and some laborers, then go home, sit back and sip some margaritas waiting for the checks to roll in. Some people don’t work at all, they are able to live entirely off the profits from their capital investments. What I am saying is that this situation, in whole or part, would be impossible to sustain in a free market; in a free market, the only way to add to your wealth is by you personally adding value either to or through your capital. In other words, there would be no dividends in a free market. I don’t know how to be any clearer.

Your point that you insist on using an ambiguous word?

And what game is this, given that neither puts out very much in the way of rhetoric.

It isn’t nonsense if you realize that the Fortune 500 companies are in that postition because of direct or indirect state intervention.

You mean like, anarchism?

Like the poor, except, you’re big fans of the poor.

It’d be wonderful if the leftists were consistant every now and then.

You are exactly right. The poor are in their current situation because of state intervention.

No. That was not what I wrote.

Do you really believe this? It is completely fallacious.

As long as they came by their capital and their investment profit honestly, what is the problem here?

How does that follow? In a free market I will have restraints on how I deploy my capital? That’s news to me. Are you saying the competitive process will undermine any attempts to deploy my capital in an organized sense? If so, how, why?

You’re making a claim, but not explaining why it is true.

Again, why? Are you saying in a free market, people will not pool their capital and divide profit based on ownership of that capital?

You are clear now. I was confused before because what you wrote before appeared to me to believe incorrect, and I didn’t see you as someone holding false premises. But apparently (by my standard) you are holding false premises. So it is clear, and very wrong.

Either mutualists are really smart, or they really aren’t. And consequentially, I am either really dumb, or not. So I am anxious to find out, who/what is full of crap? Me, or mutualist theory?

There is no proof of that. Only the assertions of Long and Carson. If you’ve read both sides of the argument, they make an interesting case. They just fail to make the case absolutely. Their critics make excellent counterpoints.

Just because people want to believe that big bad business is 100% pure evil, doesn’t make it true. I’d like to believe we have to hold ourselves to a higher standard intellectually.

Then how do you explain class movement? Poor people can become rich and likewise.

Like the CEOs of big companies, who are worse off because of state invervention.

Of course, the poor bring it on themselves through the ballot box.

I wonder, any reason you didn’t answer my point regarding anarchism?