tgibson11: While this particular discussion seems to revolve largely around semantics, it is an important issue. People too often look at so-called capitalist (interventionist would be more accurate) economies and equate them with truly free markets. Problems that result from the intervention are erroneously blamed on "market failures", which are used to justify further interventions.
While this particular discussion seems to revolve largely around semantics, it is an important issue. People too often look at so-called capitalist (interventionist would be more accurate) economies and equate them with truly free markets. Problems that result from the intervention are erroneously blamed on "market failures", which are used to justify further interventions.
Exactly. My larger concern is that the word "capitalist" is not going to stop having negative baggage. Why embrace it then?
The Origins of Capitalism
And for more periodic bloggings by moi,
Leftlibertarian.org
If the purpose is to stear people away from using words with negative baggage, isn't it best to phrase the OP that way rather than asserting that capitalism and capitalists are anti-market?
tgibson11: Unlibertarian: Why does this matter at all? While this particular discussion seems to revolve largely around semantics, it is an important issue. People too often look at so-called capitalist (interventionist would be more accurate) economies and equate them with truly free markets. Problems that result from the intervention are erroneously blamed on "market failures", which are used to justify further interventions.
Unlibertarian: Why does this matter at all?
Why does this matter at all?
Entirely agreed. However, I'd like to observe the counter tendency that is just as dangerous. One hand, the contemporary political left tends to look at bad current conditions that were created by government intervention and blame them on a non-existant "free market", and then propose further government intervention as a solution. This is true. However, what does the contemporary political right then do? They use the exact same premise that the leftist does, I.E. that we have a free market, but instead they use it to defend current conditions as if they are legitimate results of a free economy and as if we currently have one. The rightist and the vulgar libertarian also falls into the trap of equating currently existing "capitalism" (neo-mercentalism, interventionism, corporatism, economic fascism, whatever you want to call it) with a free market, only they function as apologists for current conditions by using free market rhetoric and theories to defend elements of the status quo.
So in this sense, yes, many self-proclaimed "capitalists" are not consistantly in support of a free market insofar as they themselves make the mistake of defending big buisiness and wealth for its own sake and divorced from context, defend conditions that came about as a result of government intervention as if they came about as a result of a free market process, and defend all currently existing legal private property titles as if they are just (a common problem within utilitarian economics that Rothbard tended to point out was a dangerous mistake). In doing so, the "capitalist" becomes a living and breathing caricature of precisely the cliche knee-jerk apologist for the rich and corporations that the political left is attacking (and mischaracterizes all genuine free market proponents as being representative of).
I'm of the camp that considers the term "capitalism" to be an anti-concept in contemporary public discourse and therefore I think that the word has outlived its meaning and usefulness. Since the word has so many different, mutually exclusive and contradictary meanings attached to it in political ideology and discourse, it is almost impossible to know with any certainty precisely what people are talking about when they make use of it.
The way the term "capitalism" is used, it could mean any of these things, some of which completely contradict eachother:
1. The formation and use of capital.
2. A free economy without state intervention, free competition, voluntary exchange, laissez-faire, etc.
3. Government favoritism towards buisiness, patronage between state and buisiness, corporatism, etc.
4. Separation between labor and ownership.
5. The currently existing system.
The formation and use of capital arguably has been going on in some form for millenia. Could the bulk of the history of modern civilization therefore be considered "capitalist"? Nah, that would be silly.
Austrians and free market libertarians (when some of them are not occasionally displaying vulgar tendencies) tend to use the 2nd definition, the laissez-faire definition of capitalism. Since they are consistant free marketeers, they see the third defintition as being an entirely separate system (mercantalism, corporatism, fascism, etc.) that fundamentally contradicts the idea of non-intervention, free exchange and free competition.
Laissez-faire proponents may have varying views on the separation between labor and ownership depending on what kind of theory of value they hold, although all would tend to agree with a labor theory of property and thefore oppose the separation between labor and ownership at least in those terms. Market-oriented anarchists who still hold to a labor theory of value, however, obviously are going to have a somewhat different and more strict view of what constitutes separation between labor and ownership.
Many on the contemporary political right, whether purposefully or not, are using the third and fifth definition of capitalism. They are economic fascists or corporatists, even when they are engaging in quasi-libertarian and free market rhetoric. They use "capitalism" to describe the current system. To the extent that they may support laissez-faire at all, their support is lukewarm and any deviation they make automatically takes them outside of the realm of laissez-faire and into the realm of interventionism at best.
The currently existing system in most places is some kind of mixed economy, some with a bit more of a socialist edge and others with a bit more of a corporatist edge (such as America). Obviously this would contradict the laissez-faire definition and entails some kind of separation between labor and ownership.
Agree with you on this. Even more so as the term itself has been coined by Karl Marx and was used right from the beginning to smear against all non-socialist concepts. Right now i think the term "free market" is much better and less tainted.
In the begining there was nothing, and it exploded.
Terry Pratchett (on the big bang theory)
Brainpolice:Furthermore, yes, I oppose all corporations (as they currently exist) because they are not free market entities. They are legal entities based on a government charter that recieve special privileges. There is no such thing as a modern corporation in a free market, only multiple proprietorships in which the risk is beared internally. Corporate personhood is collectivist or anthropromorphic, as it is treating a collective of private individuals as one person. As such, the individual actors are not treated as being responsible for their actions.
Hold it.
Just because states recognize corporations does not mean that corporations are creatures of the State. States also recognize marriage, and exclude some from it, but marriage is not a creation of the State.
There is no conflict between (market) law, ownership, and corporations. A corporation is literally nothing but a trust with many beneficiaries. If you object to corporations on the grounds you have given, you have to object to trusts as well. (Though I'd imagine its just as PC to object to trusts as it is corporations)
You obviously object to corporations because you don't understand the concept of limited liability. The idea that "individual actors are not treated as being responsible for their actions." does not hold up. Limited liability only applies to Investors, as they are liable for only as much as they contribute. They can lose their original investment, but they can't get a bill for anymore. Whats the immoral implication here? That people won't lend to corporations beyond their capitalization? Oh the horror! And if the corporation should perform any illegal activity the managers are personally liable.
Without capital being able to pool in corporations we would return to when wealthy families commanded capital markets.
Unlibertarian: If the purpose is to stear people away from using words with negative baggage, isn't it best to phrase the OP that way rather than asserting that capitalism and capitalists are anti-market?
I'm not entirely certain that I asserted capitalists were necessarily "anti-market."Just that capitalism is not synonymous with free market.
JonBostwick: Brainpolice:Furthermore, yes, I oppose all corporations (as they currently exist) because they are not free market entities. They are legal entities based on a government charter that recieve special privileges. There is no such thing as a modern corporation in a free market, only multiple proprietorships in which the risk is beared internally. Corporate personhood is collectivist or anthropromorphic, as it is treating a collective of private individuals as one person. As such, the individual actors are not treated as being responsible for their actions. Hold it. Just because states recognize corporations does not mean that corporations are creatures of the State. States also recognize marriage, and exclude some from it, but marriage is not a creation of the State. There is no conflict between (market) law, ownership, and corporations. A corporation is literally nothing but a trust with many beneficiaries. If you object to corporations on the grounds you have given, you have to object to trusts as well. (Though I'd imagine its just as PC to object to trusts as it is corporations) You obviously object to corporations because you don't understand the concept of limited liability. The idea that "individual actors are not treated as being responsible for their actions." does not hold up. Limited liability only applies to Investors, as they are liable for only as much as they contribute. They can lose their original investment, but they can't get a bill for anymore. Whats the immoral implication here? That people won't lend to corporations beyond their capitalization? Oh the horror! And if the corporation should perform any illegal activity the managers are personally liable. Without capital being able to pool in corporations we would return to when wealthy families commanded capital markets.
Sorry, corporate personhood is not the result of a free market. It is quite clearly a legal privilege from the state. Contemporary corporations are legal entities, not purely market entities. It's not that the state recognizes corporations, it's that the very definition of a corporation is the result of a legal precedent or charter created by the state. This legal privilege should be revoked no less than that of central banks. A corporation, as it currently stands, is a state-created legal title, not the result of a non-existant free market process.
Niccolò: wuzacon: In order to move this discussion to the question of whether capitalism can exist without the state, you must provide the group with your definition of the term. . . Please enlighten us of your definition including the source of the term and how it is intended to be used. If you would like to convince us that the term "capitalism" is per se anti-free market, you have to provide a logical explanation. Um... Actually, I have. Read post 1 Capitalism is not free market... How could it be when from its very conception it relied upon the state?
wuzacon: In order to move this discussion to the question of whether capitalism can exist without the state, you must provide the group with your definition of the term. . . Please enlighten us of your definition including the source of the term and how it is intended to be used. If you would like to convince us that the term "capitalism" is per se anti-free market, you have to provide a logical explanation.
In order to move this discussion to the question of whether capitalism can exist without the state, you must provide the group with your definition of the term. . .
Please enlighten us of your definition including the source of the term and how it is intended to be used. If you would like to convince us that the term "capitalism" is per se anti-free market, you have to provide a logical explanation.
Um... Actually, I have.
Read post 1
Capitalism is not free market... How could it be when from its very conception it relied upon the state?
Capitalism is not free market...
How could it be when from its very conception it relied upon the state?
A negation is not a definition. Your statements that the Muscovy Company is an example of capitalism neither define capitalism nor help us to understand what you mean by capitalism. While there may be confusion (as there is with terms like "inflation") that does not make the term more or less useful. So far I don't agree with you that capitalism is a negative term. The word is clearly a conjugation defining a form of social organization organized around capital.
The Muscovy Company was a mechanism for the state to collect tariffs. It was not dependent on private capital, but rather a grant of privilege with the quid pro quo that the trading organization would collect rents for the state. Sounds like feudalism except that the exchange of agricultural goods were replaced with the exchange of commercial goods.
I think you have given up on the english language too much.
Also, nowhere in the wikipedia post does the term "capitalism" or any of its roots appear. I just don't see why you wish to tell us that this is the prime example of capitalism without ever pointing to any source that connects this company with capitalism. You have made vague assertions, but you will have to do better than that.
wuzacon: A negation is not a definition.
A negation is not a definition.
So that capitalism is a system of business relying on the institution of a state is not a definition... Ok then.
wuzacon: Your statements that the Muscovy Company is an example of capitalism neither define capitalism nor help us to understand what you mean by capitalism.
Your statements that the Muscovy Company is an example of capitalism neither define capitalism nor help us to understand what you mean by capitalism.
Of course it does. If it is accepted that the Muscovy Company - as arguably one of the most influenctial companies and indeed the oldest, coupling with the fact that it is the corporation that introduced the model of a capitalist institution - is the standard of a capitalist corporation and a model for the capitalist society.
wuzacon: While there may be confusion (as there is with terms like "inflation") that does not make the term more or less useful. So far I don't agree with you that capitalism is a negative term. The word is clearly a conjugation defining a form of social organization organized around capital.
While there may be confusion (as there is with terms like "inflation") that does not make the term more or less useful. So far I don't agree with you that capitalism is a negative term. The word is clearly a conjugation defining a form of social organization organized around capital.
Apparently, it isn't...
As far as Capitalism being a term with negative connotations, however, I do not understand how you can deny this.
wuzacon: The Muscovy Company was a mechanism for the state to collect tariffs. It was not dependent on private capital, but rather a grant of privilege with the quid pro quo that the trading organization would collect rents for the state. Sounds like feudalism except that the exchange of agricultural goods were replaced with the exchange of commercial goods.
Uh huh... I.e. a capitalist company.
wuzacon: I think you have given up on the english language too much. Also, nowhere in the wikipedia post does the term "capitalism" or any of its roots appear. I just don't see why you wish to tell us that this is the prime example of capitalism without ever pointing to any source that connects this company with capitalism. You have made vague assertions, but you will have to do better than that.
I took it for granted that even a child could do a quick google search about, "The Muscovy Company."
[The Muscovy Company] began in 1553 as a group supporting exploration of a possible northeast passage to Asia. An expedition under Richard Chancellor reached the White Sea, and Chancellor himself continued overland to Moscow. The company was chartered in 1555, with a monopoly on the newly opened Russian trade, and between 1562 and 1579 it financed expeditions to establish overland trade routes to Persia. In 1646, English merchants were excluded from Russia, but trade reopened on the restoration (1660) of Charles II, and the company was reorganized as a regulated company. It lost its monopoly, long a subject of political opposition, in 1698 but continued in existence until 1917. The Columbia Encyclopedia, Sixth Edition. 2001-07.
[The Muscovy Company] began in 1553 as a group supporting exploration of a possible northeast passage to Asia. An expedition under Richard Chancellor reached the White Sea, and Chancellor himself continued overland to Moscow. The company was chartered in 1555, with a monopoly on the newly opened Russian trade, and between 1562 and 1579 it financed expeditions to establish overland trade routes to Persia. In 1646, English merchants were excluded from Russia, but trade reopened on the restoration (1660) of Charles II, and the company was reorganized as a regulated company. It lost its monopoly, long a subject of political opposition, in 1698 but continued in existence until 1917.
The Columbia Encyclopedia, Sixth Edition. 2001-07.
In fact, throughout most of history, and indeed the history of capitalism, the notion of a "free-trade" and a "capitalist" economy has always been in the form of merchant capitalism - i.e. what capitalist apologetics now term, mercantilism (a scapegoat for poor, beaten capitalism ).
Indeed, this seems to be the system that Marx pointed out - wrongly conflating it with free-markets - in his Communist Manifesto.
The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.
Brainpolice: It's not that the state recognizes corporations, it's that the very definition of a corporation is the result of a legal precedent or charter created by the state.
It's not that the state recognizes corporations, it's that the very definition of a corporation is the result of a legal precedent or charter created by the state.
A charter is nothing more than the state promising to not aggress against a group of people for voluntary association.
You see the charter system as enabling the formation of corporations. Thats not accurate, but it has not necessarily limited it either. It has distorted it. It has privileged some and hindered others.
The charter is very useful because the state can privilege its friends but prohibit their competition. That state has selectively respected property rights as well, but that doesn't make property a creation of the state, thats a marxist fallacy.
You, of course, are only speaking of the English legal tradition and its mercantile state. Yet corporations have existed and operated under other very different states. And have been completely outlawed under others.
Sorry, the corporation is a modern invention that different states have reacted to differently.
Corporate personhood, as it currently exists, is a state imposed legal precedent, not the result of a non-existant free market. It should be abolished along with anything else. Beyond the legal status itself, many corporations are in patronage with the state.
Brainpolice: Corporate personhood, as it currently exists, is a state imposed legal precedent, not the result of a non-existant free market.
Corporate personhood, as it currently exists, is a state imposed legal precedent, not the result of a non-existant free market.
So is property.
JonBostwick: Yet corporations have existed and operated under other very different states. And have been completely outlawed under others. Sorry, the corporation is a modern invention that different states have reacted to differently.
Yet corporations have existed and operated under other very different states. And have been completely outlawed under others.
Actually, it seems that historically, in the context of the development of capitalism from 9th century Arabia to 21st century America, corporations are little more than partners of the state.
JonBostwick: So is property.
Brainpolice and I would probably disagree with you here.
As property is an entity that exists regardless of a state, the modern corporation is not.
JonBostwick: Brainpolice: Corporate personhood, as it currently exists, is a state imposed legal precedent, not the result of a non-existant free market. So is property.
Property in and of itself does not derive from the state. Property naturally forms as a result of the transformation of resources by people (I.E. the labor theory of property). But not all currently existing state-defined property titles are just according to libertarian theory dealing with legitimate and illegitimate property aquisition/appropriation. Surely you make a distinction between the currently existing legal status of property and rightful ownership of property? Currently existing corporations are not natural formations from a free market, as we don't have a free market. Granted, some may be more independant than others, but many are in patronage with the state and all of them have a fundamental legal privilege.
Niccolò: JonBostwick: So is property. Brainpolice and I would probably disagree with you here. As property is an entity that exists regardless of a state, the modern corporation is not.
How do you know? In either case? What stateless society proved the existance of property? If propery can be justified on purely natural rights, or even utilitarian grounds, then so can the corporation.
Even if it were historically true that the corporation has only existed under the state, that would not prove that corporation can only exist under the state.
If corporations exist because of the state, then they would disolve in a stateless society. If corporations were able to function without the state, then they would prove themselves to be market entities.
So how you feel about them is irrelevant. If you are right and they are statist, they will disapper without your help. But if you are wrong, you would be crusading against a peaceful use of another person's property.
Brainpolice:Property in and of itself does not derive from the state. Property naturally forms as a result of the transformation of resources by people (I.E. the labor theory of property)
If theory can justify property, theory can justify the corporation.
The labor theory of value is fallacious. Anything scarce can have value, not just labor.
Brainpolice:But not all currently existing state-defined property titles are just according to libertarian theory dealing with legitimate and illegitimate property aquisition/appropriation.
Agreed.
Brainpolice:Surely you make a distinction between the currently existing legal status of property and rightful ownership of property?
I can. You're the one trying to use the current legal status as proof that corporations are excluded from the rightful ownership of property. You are using the same fallacious argument as vulgar libertarians, only in reverse.
Brainpolice:Currently existing corporations are not natural formations from a free market, as we don't have a free market.
If all current corporations are invalid because we do not have a free market, then all current property is invalid for the same reason. But you are not speaking against all current corporations, you are opposed to all corporations that could ever exist.
If propery can be justified on purely natural rights, or even utilitarian grounds, then so can the corporation.
A utilitarian analysis is not enough. The corporation may be defended on certain utilitarian grounds, but it cannot be legitimized via utilitarian theory. The contemporary corporation as a legal entity is not justified based on non-utilitarian libertarian theories.
The premise at hand is not that corporations have existed under the state, it's that they are the result of the legal privilege of the state. They are the consequence of legal status, patronage with the state and cartelization.
If corporations exist because of the state, then they would disolve in a stateless society.
And they will.
If corporations were able to function without the state, then they would prove themselves to be market entities.
At which point they would cease to be corporations in any contemporary sense of the term.
Brainpolice: If corporations were able to function without the state, then they would prove themselves to be market entities. At which point they would cease to be corporations in any contemporary sense of the term.
Even if the concept of limited liability remains intact?
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