There seems to be a renewed interest in what is called “socialism.” And there are all sorts of debates available on the internet, titled “Capitalism vs Socialism.” And as I listened to these debates, it is apparent that talk is at cross purposes. For one, no one in the current debates about capitalism seems to know how to define “capitalism.” All proffered definitions are inadequate. It cannot be defined simply as a market economy, because a market economy has always existed — it is called trade or barter. It cannot be defined by the incentive of profit, because that incentive again has always existed. It cannot be defined as a form of chattel slavery or serfdom. And it cannot be defined by an employer-employee relationship, because this too has always existed, as, for example, with mercenary armies.
Capitalism — though it had prior existence — did not loom large until industrialization, i.e., until there occurred large scale factory production which needed workers. It is the method by which workers are recruited (or forced to seek work) which distinguished capitalism from such systems as slavery and feudalism. And perhaps a clear case of “recruitment” is illustrated by the British way of obtaining field workers in Africa — without resorting to slavery or feudalism, — simply by imposing a “hut tax,” which is equivalent to a contemporary property tax on real estates.
But the root of capitalism is really even more basic. It consists in forbidding people to occupy subsistence land for free. And to enact such a policy there must be someone who by force prevents you from taking up free subsistence land. And that someone nowadays is the government. So, if the necessary condition for capitalism is this exclusion from taking up free subsistence land, and this exclusion is the work of a government, capitalism should be seen as a political matter, and, thus, the study of economics is better referred to — as it was in the past — as “political economy.” It is only, by abstracting the political element that the system thus engendered can be called “economics.”
The upshot of my discussion is this. Anyone who talks about capitalism without mentioning the necessity of excluding people from taking up free subsistence land, does not know what they are talking about.
Given this understanding of capitalism, the antithesis of capitalism is — if there is a government — the permission, or the right, of taking up free subsistence land.
The only one of the recent writers who saw this clearly was Jerry Cohen, who vividly portrayed the situation by using Al Capp’s fanciful cartoon creature, the Shmoo, as representing the fruits of subsistence land.
What is called “socialism” is meant to be a corrective to capitalism — not necessarily its antithesis, which, rightly understood, is anarchism (or “libertarian socialism”).
The state or “authoritarian” socialist corrective relies on using a centralized government to institute welfare programs. The nearest remedy or compensation for depriving people of a free access to subsistence land, is something like a negative income tax, or a universal minimum income.
What is presented by Richard Wolff as the “new socialism” or worker-owned and operated enterprises, seems to be a form of state socialism and social democracy. Wolff offers the Mondragon Corporation as a model. Such businesses are not antithetical to capitalism — and, in fact, are just one form of a capitalist undertaking, as are various communal enterprises, such as the Amish or the Anabaptist Mennonites. They are not antithetical to capitalism as long as their land could be purchased, and they are subject to property taxes.