Is Capitalism a Political rather than an Economic system?

As I keep thinking about capitalism and socialism, and keeping in mind Max Weber’s characterization that the necessary condition for capitalism is the presence of a proletariat (= people who are deprived of access to means of production), it strikes me that the existence of a market economy is not essential (i.e., not necessary). Using John Searle’s insights about institutional facts, capitalism as a market system is a consequence of a law which forbids people from free access to subsistence land. And the law making power is the result of the government structures which are in existence. The market economy is, thus, the result of having governments which pass such laws. Capitalism is then rightly to be understood as a market economy which is created as a byproduct of a law which bars people from a free access to subsistence land.

The only one who focused on this political fact was Bernard Shaw, who said the following: “To begin with, the word Capitalism is misleading. The proper name of our system is Proletarianism.” [See Capitalism = Proletarianism] Barring people from doing whatever, can be called a political or coercive act. In that case Proletarianism [aka Capitalism) is a political system.

I know that people who defend Capitalism focus of the market transactions between a employers and employees, pointing out the benefits to the economy — technological innovations, mass production, and better living conditions. And this is true, except for the existence of the unemployed, the underemployed, and poverty.

I tried to understand the characteristics of capitalism (=proletarianism) by the model of two persons marooned on an island. [See Three forms of slavery: chattel slavery, serfdom, and wage-slavery]

There was one transaction between Crusoe and Friday which has bothered me. This is the situation in which Crusoe and Friday share the island equally, but Crusoe has a rifle and bullets, and the island if full of wild animals which can easily be hunted with the rifle. Crusoe offers Friday the use of the rifle on the condition that Friday is to provide to Crusoe half of all his kills. Friday agrees because he will be better off hunting with a rifle rather than by some more primitive mode. He will have more food with less effort, and more leisure. Here we have a situation in which Crusoe reaps a profit from Friday without doing any work himself. We can also call this an employer-employee relationship.

My point here is that you can have a market economy without slavery, serfdom, or wage-slavery. Or, put otherwise, a market economy can exist without Proletarianism (aka Capitalism).

What prevents Friday from making his own rifle and bullets?

On the island, nothing.

On the mainland, a government with a patent law!

Peasant Proprietorship

In the audio below, Bertrand Russell distinguished between peasant proprietorship and agrarian socialism. In his book on Bolshevism, Russell uses the word “communism” instead. I am puzzled by what point Russell was trying to make. Let me explain. Since the necessary condition for capitalism is depriving people of a free access to subsistence land, then [free] peasant proprietorship — i.e., without taxation, would be antithetical to capitalism, and compatible with anarchism. So, Russell’s use of the term “socialism” is not used as a simple antithesis to capitalism, but seems to require for him a co-operative form of organization.

Now, Karl Marx, in his critique of capitalism, was writing about the class struggle between proletarians and industrialists — and the resolution of this struggle was to be worker-controlled factories. But a peasant proprietor is not a proletarian. A proletarian is someone who does not have access to free modes of production. But free access to land is a type of free access to a mode of production.

Peasant proprietors should have been left alone with the freedom to form co-operatives — agrarian socialism. Instead, under Stalin, Ukrainian peasants were wiped out or forced into collectives.


I met Lenin in 1920 when I was in Russia. I had an hours talk tete a tete with him. And he spoke English much better than you would have expected. The conversation was in English. I expected it to be in German. But I found his English was quite good.

I was less impressed by Lenin than I expected to be. He was of course a great man. He seemed to me a reincarnation of Cromwell, with exactly the same limitations that Cromwell had — absolute orthodoxy. His any proposition could be proved by quoting a text in Marx. And he was quite incapable of supposing that there could be anything in Marx that wasn’t right, and that struck me as rather limited.

I decided one other thing about him because his great readiness to stir up hatred. I put certain questions to him to see what his answer would be. And one of them was: you profess to be establishing socialism but as far as the countryside is concerned, you seem to me to be establishing peasant proprietorship, which is a very different thing from agricultural socialism. And he said, “Oh, dear me, we’re not establishing peasant proprietorship.” He said, “You see there are poor peasants and rich peasants, and we stirred up the poor peasant against the rich peasants, and they soon will hang them to the nearest tree — ha, ha, ha, ha.”

I didn’t much like that.

Labor Theory of Value

Dr. Richard Wolff debates libertarian Antony Sammeroff on the Labor Theory of Value on the Lions of Liberty Podcast, hosted by Marc Clair. This is a Marxist economist debating a free market libertarian.

I admire Richard Wolff, and his efforts to bring Marx’s views into the evaluation of capitalism. I also use Marx for this purpose. But we approach Marx from different perspectives. Wolff focuses on the labor theory of values, and defines exploitation as the surplus value obtained from an employee by the employer. I cannot dispute the meaning of “exploitation” in this technical, stipulated sense. But the word “exploitation” also carries a negative sense of injustice. Libertarians object to this additional sense of injustice, by pointing out that the employer-employee relation is based on an agreement — a contract. And, as long as both abide by the agreement, no injustice has been done.

There is an injustice, but, in my view, it does not come from the employer and his profits; it comes from the political system which bars people from free access to subsistence land — making land into a sellable and taxable commodity. This forces people into a market economy, and there is no choice here — everyone has to enter the market economy. Both employer and employee are victims from this perspective. Compare this with two gladiators thrown into the arena. One is strong; the other weaker. One wins; the other loses. One is an employer; the other an employee. The injustice is in the fact that both gladiators have been forced into the arena.

I see no reason to bring into considerations anything other than the principle of supply and demand to account for a labor market and wages. For example, in my field of philosophy, there was and is an oversupply of eligible teachers — as there is in most fields of learning; consequently, colleges have found that it is more economical to hire “adjunct” teachers than full-time teachers. Let’s take a look at the salaries at City Colleges in Chicago, where I worked as an adjunct. Full-time teacher salaries range from roughly $60,000 to $100,000 per year. So, let’s say, an average full-time teacher gets $40,000 for teaching four 3-credit courses per semester. From one perspective, this is $10,000 per 3-credit course; while the adjunct will get at most $3,000 for teaching the same course. Furthermore, an adjunct cannot teach more than 3 such courses per semester at this school; so, for 2 semesters, he can make at most, at this rate, $18,000, as contrasted with a full-time teacher who will get $80,000. Is this just? Is this a case of exploitation?

Take other cases of popular entertainers and sports stars. Such people can earn millions — and it has nothing to do with the hours of labor; it has to do with the willingness of a large number of fans and audiences to pay large amounts to view and hear them. Let me cite a recent case. Jordan Peterson recently refused to participate in a debate with Richard Wolff at Boise State University in Idaho. His reason for refusal to participate is that he wanted a minimum of $50,000 for a 1-hour debate, which the students could not pay. Apparently, this is the minimum which he gets for his public appearances. Is this just? By the principle of supply and demand, this is what he can get; and so he takes advantage of his popularity to demand whatever he can get. If he is exploiting, he is exploiting his popularity.

I see employers in this same light of trying to get the most compensation within the market system. They will pay their employees the least they can; so that they can garner the maximum profit. I find it incoherent to think here of injustice. The concept of justice makes sense only relative to a free agreement. But when considering agreements, we must also take note of the circumstances. If there is no access to free subsistence land, what alternative does a person have? Starve, beg, steal, or work at whatever is available. Both the employer and the employee have been thrust into the arena of the market, just like gladiators, and they must do the best in the circumstances. The injustice is that both employers and employees have been forced into the market economy against their will. We have all been barred from a free access to subsistence land by governments.

So, unlike Wolff who focuses on the labor theory of values, I focus in Marx on his discussion of “Primitive Accumulation” (chapter 26) in Part VIII of Capital, where he talks about the conquest and forceful eviction of people from land. It is this barring of people from a free access to land which creates a proletariat class which must work for wages — a class of wage-slaves.

Richard Wolff keeps repeating that most economists celebrate capitalism, and that one must also take into account the critics of capitalism, especially Karl Marx. This reminds me of al-Ghazali who wrote The Incoherence of the Philosophers (Tahafut al-Falasifa) which was critized by Averroes in his The Incoherence of the Incoherence (Tahafut al-Tahafut). If Marx is al-Ghazli, then we have a slew of Averroeses who have criticized portions of Marx.

And the portion of Marx which Richard Wolff emphasizes is the labor theory of values, this is also the portion of Marx which has received the most criticism. I will cite three sources for this criticism. The first is Bertrand Russell in his German Social Democracy (p. 15). The second is Karl Popper in the second volume of his Open Society and Its Enemies (chapter 20, p. 170), the third is Alexander Gray, The Socialist Tradition (chapter 12, p. 310.)

Are worker-owned enterprises antithetical to capitalism?

Richard Wolff objects to capitalism because of the employer-employee relationship which has “exploitation” — meaning that the employer gets more money than the employee. His alternative is to have worker-owned businesses.

From my perspective, although such a co-op as Mondragon makes for a democratic workplace and a desirable place to work at, it does not constitute an antithesis to capitalism — even if all businesses are co-ops. Why? If other things are left as they are (ceteris paribus), then presumably these co-ops will compete as do all businesses for markets, with the resulting consolidation of successful enterprises as occurs now.

But the crucial question which is not answered by a system of co-ops is what happens to the unemployed? Where is the safety-valve? In the United States in mid-nineteenth century, the north-eastern coast of the United States was overpopulated with immigrants. The Homestead Act of 1862 was enacted as such a safety-valve. [Whether it worked or not, is a separate issue.] The point was that giving people a free access to subsistence land was the right solution. And not giving the freed slaves access to 40 acres and a mule in 1865 was the wrong solution.

Richard Wolff, apparently does not see that the necessary condition for capitalism — of whatever form — is the deprivation to people of free access to subsistence land.

If people have access to free subsistence land, they can bargain with employers or co-ops for living conditions preferable to a self-sufficient life on a piece of land

Anarchist and other strategies for defeating capitalism: views of James Herod

I have just discovered the existence of James Herod, who has a website at [here].

I am in sympathy with all his ideas which I have heard in the videos below. His main book is: James Herod, Getting Free: Creating an Association of Democratic Autonomous Neighborhoods, 2007. pdf file

Below is a talk he gave at Tufts University, Boston, on Nov. 28, 2012: “Introduction to Anarchism”

Here is another of his talks: Anarchist Revolutionary Strategy, Nov. 2011, Boston

Macro or Micro Democracy?

A macro democracy is one in which hundreds, thousands or millions of people vote for either a politician or a law, or both. We have macro democracy in the U.S. on the municipal, state, and national levels; as do all the countries in the world.

As I listen to the complaints about elections, they are about the following.
(1) There is a concern that there are various schemes used to discriminate as to who can vote, or to disqualify votes.
(2) There is a concern that those who have the most money contributions tend to win elections.
(3) There is concern that the media are controlled by the rich, and sway the public with their propaganda.

To offset these problems, the proposed solution for (1), is to extend the vote and to prevent tampering with vote counting; for (2), to limit contributions; for (3), to extend the access to media (as, in fact, the internet has done.)

And the most ambitious proposal is directed at educating the public in critical thinking. For example, this was the aim of Susan Stebbing’s book Thinking to Some Purpose,1939.

Her reasoning was this: Democracy relies on the judgment of the public. Therefore, the public must be trained in critical thinking, if democracy is to be effective.

Stebbing’s book is a call for the need for rational thinking, and I have no quarrel with that. And if we assume that we must work within the democratic institutions as they exist, then, yes, I agree with her prescriptions for educating the public in critical thinking.

All these proposals are on how to ameliorate the workings of the existing (macro) democracy.

I am skeptical that any of these measures — if they could be carried out — would work. Concerning the extent of the vote, women suffragettes agitated for the vote, and when they got it, nothing changed. As to limiting campaign contributions, this will not solve the problem of where the candidates come from or who they are. The public will continue to choose between a Tweedle-dee and a Tweedle-dum. As to the media, money will always be able to capture the audience with better entertainment. As to educating the public to become critical thinkers — that’s just wishful thinking.

What is my alternative?

All the above proposals are about how to work within the present institutions of government. My proposal is that we need to change the institutions of government. We should not be thinking how to change people so that they work within the present institution; rather, we should be thinking how to change the institutions to comply with the nature of people, as they are.

What Stebbing and others miss is that democracy does not have to take the form it has in either England or in the United States. It can take the form, for example, of Swiss democracy. Switzerland, for one, does not have a single leader such as a president or a prime minister; instead it has a Federal Council compose of seven individuals, nominated by four political parties, and conferred by their parliament. In this way it avoids, at least, the institution of a macro election of the executive. In general, Switzerland avoids placing any executive office in the hands of one person, and prefers councils.

Although Switzerland’s democracy is much better than anywhere else, it still relies on macro-democratic practices in electing representatives, and in voting in initiatives and referendums — though I think it is better to have them than not.

My ideal government would be a micro-democracy, in which the unit of government would be a community of some 150 individuals, who elect a council or councils for various purposes, and these councils send delegates to higher level councils. This is the ideal of anarchist communities, as espoused by, for example, Peter Kropotkin and Noam Chomsky.

There are two contemporary authors who have produced similar ideas in modern dress. One is Michael Albert, who has written on participatory economics or Parecon. — The following is a criticism of the writings of Michael Albert for neglecting the writings of anarchists (reinventing the wheel?): The Flawed Vision of Hahnel and Albert. A Critique of “Parecon” for Anarchists — Nov/ 12, 2912, Boston Anarchist Book Fair. Simmons College

Also, see his criticism of Parecon in Getting Free, 2007, p. 130. pdf file

The other is Stephen Shalom, who has written on participatory politics or Parpolity. See: Imagining Self-Governance against Predatory Capitalism and a Centralized State