It is hard to define capitalism rigorously without excluding some of the obvious characteristics of capitalism, or making the definition so general that it perhaps reduces capitalism to exchange, or ‘private property’ (as if there was only one kind of private property). This is too general to be useful, other than to pretend capitalism is innate. There are also varieties of capitalism , , and cultures of capitalism. Capitalism in Norway, is not the same as capitalism in the 21st Century UK, or 19th Century UK, or in the USA, or Japan, or India, or China etc.
So this definition is a definition by listing. If some economic system is described by a large number of these points, then it is strongly capitalist, if it has non of them it is not capitalist. Other systems may share some of these points as well.
- Capitalism is a form of State sanctioned, and enforced economic hierarchy.
- In capitalism, the majority of people have to sell their labour (physical and mental) and the products of their labour to an employer. The property resulting from labour, is generally not owned by the labourers, but by the employer prganisation. In some cases even ideas that have nothing to do with their work are owned by the workers’ employer. This general ‘alienation’ of labour may rob people of satisfaction.
- In general capitalism attempts to make all labour wage labour. It destroys self-sufficient social groups, by making them ‘uneconomic’, taking them over and merging them into a bigger company, or through violence.
- Most ordinary wage labour is governed by downward pressure on wages. Automation of labour, that removes the skills of labour helps to diminish the cost of labour, and make workers interchangeable and largely indistinguishable. However, wage labour closer to the top of the hierarchy may become more expensive, or prosperous.
- Capitalism ideally gives an employer the right to dismiss any worker in any circumstance. There are few official types of continued responsibility, obligation or relationship, between bosses and workers. Capitalism breaks social bonds around labour.
- In capitalism the power of the boss should increase, while the power of the workers is diminished. Obedience to a boss, who has no obligation to you, is one of the fundamental social relations of capitalism. It does not promote liberty.
- Capitalist property is marked by exclusion and exclusivity. In general, the owner of property has the right to destroy that property without regard to anyone else, and to exclude anyone else from using it. On privately owned land the owner can determine, as far as their intention prevails, what happens on that land. Libertarians, for example, frequently support the right of land owners to suppress protests on their land, even if that land has been appropriated from the community.
- The one exception seems to be that mining companies can often do what they like on your land to get at materials they have contracted from the State. This varies from place to place. If this is the case their is a hierarchy of property ownership.
- You can ideally sign away your rights to anything for payment. Some libertarians support ‘voluntary’ slavery.
- Capital, and property, itself grew from the plunder of colonies (or plundering of the plunder of the colonizers as with British Privateers), theft or conquest of land, dispossession of people from land, and the forced labour of human bodies. Capitalism and its property/capital is based on the products of theft, reinvested in new production. This is usually justified by instancing other forms of input and ‘improvement’ usually done by forced or wage labour. If, however, a landlord’s property is improved by tenants, then this does not apply the other way, and legally justify taking the landlord’s property.
- Capitalism usually involves the free movement of (previously appropriated) wealth (capital), and its investment in the production of more wealth. It is an ethical question, whether capitalism and its inequalities can be abstracted from history.
- Capitalism usually allows cheap ecological destruction and pollution, so as to maximise profit.
- Capitalism appears to demand constant growth and expansion. Companies also seem to demand that the rate of profit continues to grow. It is not obvious, that this can keep happening forever. If expansion cannot go on forever, then capitalism is self destructive.
- Capitalist processes tend towards concentration of wealth. While the total wealth may increase, the percentage of total wealth going up the hierarchy also increases. So inequality of prospects, action and power is magnified. If this does not happen, then the system is probably not capitalist.
- The State in capitalism, tends to be controlled by the wealth elites. The more the wealth difference between them and the rest of the populace increases, the greater the tendency.
- The State eventually becomes a tool, whereby capitalism, its property, regulation and inequality is protected. However, different businesses may have different ideas of protection, hence the State can still be a site of limited dispute.
- Capitalism’s main institution is the stock (shareholder) company – which is a form of collaboration between controllers, and owners, of wealth (capital).
- As the wealth elites own shares in many companies, and may be on the board of directors of many companies, or own those directors, collaboration between members of the wealth elites increases, at the expense of everyone else, including those who actually make the products or services the companies sell.
- ‘Crony capitalism’ is normal and approved, as is suppression of worker associations.
Contemporary capitalism has an origin in the UK sometime between the 16th and 19th Centuries. It is not natural, eternal or innate. It spread through force (East India Company, and imperialism) and also because nations wanted the same level of military might that it generated to protect themselves and gain power. States have frequently promoted capitalism, to boost their power.
The idea of the ‘free market’, acts to reduce all social and governance questions to questions of profit maximisation, and wealth increase for the wealth elites. It also tends to act as an excuse for letting ‘The Market’ determine what should be done, no matter how destructive, as long as it benefits some of those wealth elites, and dispute amongst the wealth elites does not then lead to some form of regulation to benefit (or protect) some of that elite.
Worship of the Market does not lead to liberty, because the market is regulated and patterned to favour certain groups and their existence. Liberty might be found in escape from the market.
All markets have regulation. Market activity includes politics. If people pretend markets do not include politics, then the market is probably being regulated in favour of a dominant group. There is no such thing as a ‘free market.’
As capitalism is marked by conflict between ‘workers’ and owners and controllers of employment and capital because of:
- Alienation of labour and the products of labour
- Destruction of self-sufficiency
- Forcing wages down, deskilling of labour, making workers interchangeable and impersonal (dehumanisation),
- No ties between workers and employers, other than money
- Demands for obedience from bosses
- Concentration of wealth
- Control of companies being reserved for the few
- Capitalist control of the state and increasing exclusion of non-capitalist interests, unless they support capitalist interests…
then capitalism is marked by class struggle. However class struggle is not unique to capitalism, so is not part of its definition. Also, some of this struggle can be remedied by easily available, non-policed and livable unemployment payments. These allow workers to leave bad bosses, and bad working conditions, without suffering, and can help ‘nudge’ employers into providing better working conditions and sharing more of the profit with the producers. This kind of practice increases general liberty, and so is strongly opposed by capitalists.