The following was written as a rebuttal or commentary to my article If capitalism is crap, what’s the solution? Reader Rafael Ontiveros (Raf) challenged many of my premises, and particularly my use of the word ‘capitalism’ in any positive context. I invited him to expand his thoughts to a full article, and he has done so. Axis of Logic thanks him for this, and so do I.

 

Paul Richard Harris

Editor, Axis of Logic

 

 

 

 

As I write this article, in mid December of 2009, I've heard and read a good deal of angst about economic systems. I live in the US, so Capitalism is the only game in town. But there are alternatives to it, no matter what Margaret Thatcher used to say.

 

One of the unfortunate things about discussing economic systems with people in the Imperial Colonial parts of the world is that they just latch on to ideas without any critical analysis. I cringe at the lack of thinking when I hear people parrot things like "Capitalism is the best and most efficient system ever established." When I hear or read such statements it is invariably from people who don't think about what they are saying, have never taken the issue under serious review and question, and don't want to learn any different than what they already believe.

 

So in this article I'll layout a working definition of Capitalism and what I think is a better system of Democratic Socialism, in order to give a logical comparison. Unlike disingenuous writers who only present a skewed story to push their own agenda, I'll clearly display definitions and critically discuss each piece using equally applied standards

 

Getting a working Definition of Capitalism

I started my research at ImportanceOfPhilosophy.com, which gave this definition of Capitalism from Dictionary.com:

 

"An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market."

 

Then this definition from Capitalism.org:

 

"Capitalism is a social system based on the principle of individual rights."

 

I was dismayed to read this final paragraph on the given web page:

 

"Capitalism is the only moral political system because it is the only system dedicated to the protection of rights, which is a requirement for human survival and flourishing. This is the only proper role of a government. Capitalism should be defended vigorously on a moral basis, not an economic or utilitarian basis."

 

The website copyright attributes the page to Jeff Landauer and Joseph Rowlands, to whom we can all be grateful for showing us what our moral imperatives are.

 

A closer look at Capitalism

Wikipedia's treatment of Capitalism is broad, and is a great springboard for further research. The main points on Wikipedia's page devoted to Capitalism were that there is "no consensus on Capitalism", and the central notion of "private" to the whole idea of capital.

 

Understanding that social ideas are subjective is crucial in having a rational approach to discussing them. That is, subjective knowledge and reasoning is very contextual. It is influenced by the situation and circumstances it is operating in while under discussion.

 

This kind of abstract reasoning goes beyond the Paint by Numbers way of thinking that brainwashes people in the US educational model. True reasoning comes from a combination of objective and subjective understanding. So any discussion of Capitalism that includes rigid precepts presented as immutable laws is inherently flawed. Still, subjective terms are defined and carry meaning. It is important to keep that in mind while discussing subjective matters.

 

The second crucial point related to Capitalism is the centrality of the concept of "private" to its workings. In defining Capitalism, the term “private” is fundamental because the basis for Capitalism lies in the idea that individual ownership is a virtue and that capital, being the accumulation of personal material wealth, is used to produce more personal material wealth. Proponents of Capitalism are often sanctimonious about the concepts of private property, ownership, and individualism.

 

To gain a conceptual grasp of Capitalism, it is important to get into the etymology of the term "private."

 

Private comes from the Middle English/Anglo-French "privat". This in turn is derived from the Latin "privatus", the past participle of "privare" which means to deprive. That's quite astounding – the term “private” comes from roots that mean “deprived individuals”. Anyone familiar with how European settlers took land from Native Americans, then drafted papers of ownership to claim and sell that same land, can see the connection. This process of depriving people of a commons, which Marx termed "primitive accumulation," is the first step towards a capitalist system.

 

Looking at a modern definition of “private” (at Merriam-Webster.com), the primary meaning is "intended for or restricted to the use of a particular person, group, or class." For reference, I found these definitions at TheFreeDictionary.com: "Secluded from the sight, presence, or intrusion of others" and "Designed or intended for one's exclusive use."

 

The idea of exclusivity, the shunning of others, the defining of others as intruders, and the depriving of individuals of their commons for the sake of individual want, are key here since the opposite of private is public. The tension in economic social issues in capitalistic societies today boils down to a struggle between those who propose individual exclusivity versus those who propose public rights and the idea of a commons.

 

This leads us to a related word: "privilege.” Again Middle English/Anglo French provides the root for "privilege", once again as an offshoot from Latin. In Latin, the word is formed from a combination of words meaning individual and law. The corollary, of course, is that having a separate standard of law for a given person or being separate from commoners implies separate laws relating to the group as a whole.

 

TheFreeDictionary.com says “privilege” means “a special advantage, immunity, permission, right, or benefit granted to or enjoyed by an individual, class, or caste" and "Such an advantage, immunity, or right held as a prerogative of status or rank, and exercised to the exclusion or detriment of others." You can see that the term is exclusively advantageous as used currently, but the important part of the root is that it shows the social acceptability of having individuals who exist in their own legal reality apart from others.

 

Capitalism needs Selfishness

 

At this point, I've laid out enough background to present one of my premises: Selfishness is central to Capitalism. Moreover, not just selfishness in and of itself, but selfishness in contrast to others’ needs, which provides the competitive component of Capitalism.

 

Though you hear proponents of Capitalism describe this as individualism, it's actually selfishness because the exclusion of others is necessary. Individuals can be individuals while supporting a group and being socially invested; but the private nature of Capitalism necessitates that others be cast as competitors and obstacles to one's privileges. The reason for this is that no one voluntarily allows others to have advantages over them. Yet in Capitalism, the benefits are derived from contrasting oneself to others. Having a higher status than others can't happen without others having a lower status.

 

The only way to avoid this is to strip out the private nature of Capitalism, and since it is so fundamental to Capitalism the end result of doing so would not be Capitalism.

 

The Technical Aspects of Capitalism

Going back to the Wikipedia page dealing with Capitalism, we find the etymology of “capital” coming from the Latin word "kaput", which refers to the head of a column or pillar from Roman language. The imagery is of the head of a column as being superior to the rest of the column, thus alluding to the hierarchical nature of Capitalism. Capital, Wikipedia goes on, is in reference to "funds, stock of merchandise, sum of money, or money carrying interest" in the 12th and 13th Centuries in Eurasian culture. The meanings of "wealth, money, funds, goods, principal, assets, property, patrimony" came to be associated with it, which strengthens the connection of Capitalism as a system that serves the exclusive privileged few.

 

Next Wikipedia gives us the technical overview of Capitalism and its components of Commodities (which is split between capital goods and consumer goods), Money, Labor, Means of Production (which is a term synonymous with capital goods), and Production.

 

This is where most people get tripped up. This is just a framework, a conceptual apparatus. It's not real like air and water. People can, and have, lived thousands of years without Capitalism.

 

The technical details of Capitalism listed here is Capitalism describing itself. Of course, the self-description is going to be positive. 

 

Getting to Meaningful Conclusions about Capitalism

To apply what I just stated to the technical details of Capitalism:

 

• Commodities are either the end products (consumer goods) or raw materials (capital goods) used to produce those end products

• Money is simply an abstract unit of value to trade with, so you can exchange it for end products and not be bound by the limits of Barter, which would be the exchange of end products for one another

• Labor is the human component in the Production process placed together with the raw materials which result in end products

 

Remember, this is just a conceptual framework. The same principle can apply to money – it’s a concept, not a reality.

 

The inherent selfishness that drives the system is Capitalism being Capitalism. It is not rogue elements within a capitalistic system "gone wrong." But the shills for Capitalism would have us all believe there is no alternative, because Capitalism is good and pure.

 

No it isn’t, and there are alternatives.

 

A Working Definition of Socialism

To define Socialism, the best place to start is by defining society.

 

Taking a look at Merriam-Webster.com, the primary definition for society is "companionship or association with one's fellows: friendly or intimate intercourse". The secondary definition is "a voluntary association of individuals for common ends; especially: an organized group working together or periodically meeting because of common interests, beliefs, or profession." 

 

Socialism is defined at Merriam-Webster.com as "any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods" and "(a): system of society or group living in which there is no private property (b): a system or condition of society in which the means of production are owned and controlled by the state."

 

So here comes the boogie man of “The State”. In the Libertarian and pro-capitalist realms of thought, "the State" has come to mean the specter that will come and get you and, more importantly, your stuff. This is done to promote a false definition of Socialism, for fear mongering purposes, of it being a system that allows authoritarian police states to murder and steal from it's citizenry.

 

The irony is that the privileged and selfish nature of Capitalism is what gives rise to these police states through combinations of corporatist and fascist social structures. Though some societies have arisen that called themselves socialist or communist, and did implement totalitarian regimes, a closer examination of those societies reveals a breakdown of rule by consensus of the people, to be replaced instead with centralized oligarchical mechanisms. The violation of the public decision-making process is what led to these authoritarian implementations. This is not the inevitable result of Socialism, as these fear mongers falsely claim.

 

The Real Contrasts between Socialism and Capitalism

Socialism has foundational elements just like Capitalism does. Those foundational elements are contrasting, which gives rise to the natural contention of Socialism and Capitalism as competitors for how a society should run. For Socialism, the core concepts are fellowship and companionship, just like the concepts of private, privilege, and individualism work for Capitalism.

 

Socialism is a system that prioritizes the communal reality, while Capitalism shuts that out by replacing it with individualism. One cannot both prioritize individualism and communal fellowship as the end goal of a social system, they are competing end states and at some point one will have to take precedence. This reveals the flaw of those who propose sitting on the fence forever, championing social responsibility but insisting it must be within a capitalist social structure. This irrational thinking is pushed by those wanting to "save" Capitalism by making it more socially responsible, ignoring that Capitalism fundamentally runs on selfish interest alone.

 

Another contrast in core elements is the adherence to mutual interest, mutual benefit, and mutuality in Socialism contrasting with the elements of exclusivity and increasing privilege for Capitalism. The payoff in Capitalism is the exclusivity and compounding privilege that profits get one in that kind of social structure. It makes no sense to take on the risk and go through all the cost of producing goods simply to serve your neighbor or society as the end goal – that kind of thinking is anathema to Capitalism.

 

In Socialism, the end goal is the benefit of all concerned.

 

In Socialism, the end goal is everyone living with dignity and living well. Having people stratified at either extreme isn't conducive to that. Moreover, this dignified state of living is the end product in Socialism, not an abstract ideal hopefully arrived at, as in Capitalism.

 

Lastly, the contrast of hierarchy in Capitalism versus the horizontal inclusive structure of Socialism makes Socialism the ideal economic system for Democracy.

 

The Role of Democracy

A democratic government run by people who are economically enslaved, by virtue of being forced to work for necessities, doesn’t have much to offer. Moreover, those people receive a lower social status as the end result of their labor in a capitalistic system. This process results in overworked people not wanting to participate civilly. Additionally, the privilege of the capitalist owners gives that group too much sway over governmental mechanisms. The top capital class will have the most time and money to influence the government for their personal benefit.

 

Looking at the US political system in December 2009, it would be laughable to say that it doesn't function like a mafia-state. The collusion between the US government and the top capital class is the elephant in the room that can't be ignored, yet hardly anyone speaks about it directly. I hope the "we can still save Capitalism with tinkering" crowd can grasp the absurdity of their idea when thinking about this last point.

 

Socialism, on the other hand, is a system devoted to better mutual ends for all involved. The strength of fellowship in Socialism versus the divisiveness of individualism in Capitalism, feeds into a stronger whole for the community. The participatory process is a daily event in Socialism, since daily needs are met through cooperative ventures within the community. The strongest ways Socialism and Democracy compliment one another are in how they require a participatory process in both democratic decisions and the daily meeting of economic needs. Another benefit is that living in the context of a socialist economy allows freedom from the individualistic focus of Capitalism, creating an inclusive environment for democracy to operate in.

 

The Crux of Individualism versus Social Mutuality

What becomes apparent here is the role of individualism versus collective mutuality in the Democratic process. In Capitalism, cooperation is funneled through individualistic goals of profit. But cooperation is a fundamental element of Socialism. One can be an individual all they want while cooperating with other individuals – living cooperatively doesn't cancel one's individual self.

 

The difference between Socialism and Capitalism is in the foundation and what provides the driving force – individualism or cooperation for mutual benefit. For the fence sitters still with us, both can't be the primary force driving the other - they are mutually exclusive.

 

This way of thinking is so alien to the propaganda the Capitalist media blasts people with all day in the US. The ideas of access to selfish pleasure-seeking being freedom, and the never ending cycle of spend-possess-throw-away and then start-over being prosperity, are brainwashed from birth in the USA, the capital of Capitalism. But in reality, personal fulfillment comes from being productive and contributing to others while enjoying their contributions to you.

 

We have a crisis of care giving in the US, because we are socially conditioned to be self-absorbed. The Capitalist system compels us into labor to gain monetarily in order to consume, without a connection to living things or natural living processes. 

 

The end result of this selfish living is an encasing of ourselves within ourselves, our only relationships are cast in monetary and material accumulation and working for them, with some obligatory relationships such as family or church as adjuncts. By living in this fashion, the by-product of Capitalism, we become commodities of that system ourselves. By living in this kind of social system we function as consuming and producing units, we serve the system and it doesn't serve us.

 

The Difference Between Living in a Socialistic or Capitalistic Society

 

People operating in this fashion are having their humanity stripped away. Living in the context of others is an essential part of being human. Only a system that has this aspect of mutual cooperation built in can nurture our selves with others. That’s what Socialism is. Capitalism fosters undermining one another for personal gain.

 

What is commonly talked about as a path to individualism is really a dull prison of self-absorption that necessitates base pleasure-seeking as an escape. The toll this takes on our human psyche is bland, frivolous lives that might include destructive obsessions.

 

Socialism, with cooperative living as its premise, provides a way of reconnecting with those around us as a basis of daily operation. Instead of living to work and relating to others in between, our productivity can be incorporated with others as a community in a socialist system. The freedom of time and the reconnection with others would offer the true freedom to be individuals. Instead of shopping for stuff to express one's individualism, the extra time and freedom in daily life would allow an individual to develop without exterior limits.

 

Social systems are arenas we can choose to live in, and some arenas are better than others. But the fact of individual choice will always be something to contend with when living with others. Even an ideal social system doesn’t take away the need to deal with people's misbehavior, potential for harm, crime, need to repel potential attacks, and so on. A system itself cannot fix everything.

 

It may sound odd to think of Capitalism in the US as limiting one's freedom of choice; but when you think of the economic constraints you're placed in to serve the needs of the capital class overlords, you get the picture clearly. Add to that limited individualism the missing out on being an active community member along with those around you, and you see a society that is functioning at a fraction of what it could be humanisticly.

 

Capitalism is about depriving you, then selling back to you what was deprived. Socialism strips away all that abstraction and let's one deal with the real world as it is, no need for money or hierarchical status. Then Socialism fosters communal cooperation in dealing with that real world. Adding the Democracy aspect provides the civil and governmental administration of social order, safeguarding against too much centralization. This system pays off with the benefits of filling in the gaps of what you can't provide yourself and cultivating strong relationships with others as you build together, rounding out your fulfillment.

 

One way of thinking about the contrast between Capitalism and Socialism, is that Socialism offers living with deeper relationships with more people and time. This can be summed up as having less of a human experience with Capitalism versus having more of a human experience with Socialism.

 

References:

 

Wikipedia: http://en.wikipedia.org/wiki/Capitalism

 

Importance of Philosophy: http://www.importanceofphilosophy.com/Politics_Capitalism.html