What is capitalism?

Looking back at my postings, I notice that I keep charging people with not knowing what they are talking about when they talk about capitalism. I made the charge against Stefan Molyneux, against Jordan Peterson, against Peter Joseph, against Slavoj Zizek . . . and I could go on leveling this charge about almost every public intellectual and talking head on the internet.

In the literature on capitalism, various socialists and anarchists understood what capitalism was — including Karl Marx, Max Weber, Franz Oppenheimer, Bernard Shaw . . . Of contemporaries which I have considered, there was only one who clearly understood what capitalism was — this was G. A. Cohen, when he compared Al Cap’s Shmoo to land. [See Criticism of Capitalism by G. A. Cohen, reflecting on Al Capp’s creature, the Shmoo]

What is the source of this ignorance about capitalism? Well, we are all familiar with commerce — the idea of producing something, selling and buying. Or, just the idea of buying, and then reselling at a higher price.

People identify capitalism with commerce. Is this wrong? No, but this is only a necessary component of capitalism — a component which has always existed as far as history can tell us. Given the difference in talents and interests, people have specialized in some craft, and traded or sold their manufactured items or their services.

So why is this not a sufficient characterization of capitalism? For one, this type of activity has existed within and between tribes. It has existed under slavery and under serfdom.

Historically, capitalism is — as a widespread phenomenon — something that came historically after slavery and serfdom, and it came with industrialization, i.e., when machines became available for mass production.

What was needed for industry was workers. But where to get them?

Most people almost everywhere have been peasants, getting a living from planting edibles and keeping domesticated animals.

What was needed was to get these peasants into factories. But how? Deprive people of free access to land, or make it available only for a price.

This can happen, so to say, “accidentally” or as a deliberate political act. The “accidental” deprivation of land to the people occurred in England with the advent of industrial textile machinery. There was a great demand for wool, and consequently landlords evicted the peasants from their lands for the sake of sheep pastures. This created a landless class of people who were then desperate for wages. And there, you have your pool of workers!

The deliberate creation of wage workers is illustrated by the British policy in Africa of introducing a hut tax (today we have a “property” tax), which forced the indigenous people to work on plantations.

The upshot of these reflections is that modern capitalism requires the existence of people who do not have free access to subsistence land.

It is a system which forces you be an employer or an employee.

What is the alternative? Free access to subsistence land, which, incidentally, exists for all so-called primitive people, and for those who have escaped from States.

So, unless you mention that the necessary condition for capitalism is barring people from a free access to subsistence land, you do not know what you are talking about.

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