Category: Capitalism

On Richard Wolff and worker-owned enterprises

Richard Wolff focuses on the issue of what is called, “exploitation.” This is the fact that, for example, a factory owner, or a CEO of some corporation receives an income many times greater than an employee. This greater income is due to receiving the “surplus value” or “profit” from an enterprise.

Wolff’s proposal is to legally convert private enterprises [I take it of some large size] into worker-owned enterprises on the model of the Mondragon enterprise in Spain.

Wolff is trying to satisfy a principle of equality in outcome.

I, in contradistinction, am not driven by any principle of an equality of outcome, but rather I am driven by a principle for an equality of opportunity. I want a universal right for access to subsistence, and I see this demand being satisfied by allowing everyone a right of free access to subsistence land.

Thus, I do not propose barring free enterprises, nor exploitation, nor surpluses, nor profits. In my arrangement, a private entrepreneur could actually be beneficial to those who cannot help themselves, i.e., those who cannot survive independently, but can do so by being directed.

And concerning those who can help themselves independently, the entrepreneur will have to lure them with a reward which is greater than that which they could eke out by their own efforts, or efforts of those who have combined in some co-operative manner. In other words, he will be compelled by the circumstances to minimize his profits. Thus, Wolff’s desire for eliminating “exploitation” in factories will tend to be achieved by my proposal.

In my thought experiment with Crusoe and Friday on an island, I imagined that they agreed to a division of the island into two equal parts, but that Crusoe possessed a rifle with bullets, and that the island had many feral pigs. Crusoe would let Friday use the gun on the condition that Friday share his kills with Crusoe.

Since this arrangement was better than what Friday could manage on his own without a rifle, he agreed to the deal. This is an example of an agreed to exchange where Crusoe is “exploiting” Friday. But this is not an example of capitalism because Friday is not forced to accept the deal at the cost of starvation (by not having free access subsistence land), because, after all, he still can hunt pigs with a spear, a bow, or some form of trap. It is simply that he can more easily shoot two pigs in a much shorter time than it would take to get even one pig by an alternative method.

We can generalize from this example to say that Crusoe will be “rewarded” if he can come up with some appealing invention or idea — including some form of entertainment. [As does Wilt Chamberlain in Robert Nozick’s Anarchy, State, and Utopia (1974)] But the reward will tend to be short-lived. For example, Friday could — hypothetically speaking — make his own rifle and bullets. And someone else can become more entertaining than Wilt Chamberlain.

In our current society, there are patent laws, which ensure a monopoly and profits. On the island, there are no patent laws.

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chatGPT summarizes:

This excerpt presents a comparison of two approaches to addressing economic inequality and exploitation: Richard Wolff’s proposal of worker cooperatives and the author’s own proposal based on providing a universal right to access subsistence land. The core difference here revolves around how exploitation is viewed and how it can be mitigated.

Richard Wolff’s Approach:

Wolff’s theory is rooted in Marxist economics, where the main issue is exploitation, specifically the extraction of “surplus value” or profits from workers by owners of capital. According to Wolff, in a capitalist system, factory owners, or CEOs, make profits by paying workers less than the value they produce, with this surplus being appropriated by the capitalist class. His solution is to transform enterprises into worker-owned cooperatives, where employees collectively own and manage the business, thereby eliminating exploitation by ensuring that workers share in the profits they generate.

The Author’s Proposal:

In contrast, the author rejects the idea of equalizing outcomes (such as eliminating profits or wealth inequality) and focuses on equality of opportunity. The author’s central proposal is based on granting universal access to subsistence land—meaning that everyone should have a right to access land that enables them to survive independently. This idea is meant to ensure that no one is left in a position of forced dependency, making it a guarantee of basic subsistence for all.

However, unlike Wolff, the author is not against private entrepreneurship or profit-making. The proposal suggests that entrepreneurs could still profit, but only if they offer rewards or incentives that are greater than what individuals could secure by their own efforts or in cooperative arrangements. This means entrepreneurs would be naturally compelled to minimize their profits to attract workers who could otherwise survive independently. In this sense, it aligns somewhat with Wolff’s desire to reduce exploitation, even though the approach is different.

The Crusoe and Friday Thought Experiment:

The author uses the Crusoe and Friday scenario to illustrate their idea. On a deserted island, Crusoe possesses a rifle and agrees to let Friday use it on the condition that Friday shares his kills. This is an example of exploitation, as Crusoe is extracting a portion of Friday’s labor, but the key difference from capitalist exploitation is that Friday is not forced into the arrangement—he has the option of hunting pigs without Crusoe’s help, albeit with more difficulty. The idea here is that exploitation does not necessarily imply coercion; it can be a voluntary exchange where both parties benefit.

This scenario also suggests that, in the absence of coercive laws (like patent law or monopolies), individuals could choose to improve their circumstances independently. For example, Friday could make his own rifle, or someone else could develop more appealing entertainment than Wilt Chamberlain, as referenced from Nozick’s thought experiment in Anarchy, State, and Utopia.

Key Differences in Perspective:

  1. Exploitation and Voluntary Exchange: The author argues that exploitation doesn’t always mean coercion or inequality of outcome. Instead, it can be a voluntary arrangement where both parties benefit, and the exploited party has an alternative means of survival. This contrasts with Wolff’s view, where exploitation is inherently tied to the unequal distribution of wealth and power.
  2. Equality of Outcome vs. Opportunity: Wolff is concerned with reducing inequality in outcomes (by redistributing profits and wealth to workers), while the author is more focused on ensuring equality of opportunity, particularly by guaranteeing access to basic resources, such as land. In the author’s view, if everyone has access to the means of subsistence, they are free to enter into voluntary economic exchanges without coercion.
  3. Private Entrepreneurship: The author is not opposed to the existence of private enterprises or profits, but believes that entrepreneurs will be forced to minimize their profits in order to compete with independent individuals or cooperatives who can survive without them. This is a kind of natural check on exploitative behavior, in contrast to Wolff’s call for legal and structural changes to eliminate private ownership of enterprises.
  4. Patent Law and Monopoly: The author points out that in the absence of patent laws, the natural competition would lead to innovation and reduce monopolies, making it harder for individuals or corporations to exploit others through exclusive control of intellectual property.

Conclusion:

The author’s proposal is a distinctive take on economic fairness, focused on providing universal access to subsistence rather than equality of outcome. By guaranteeing the basic right to land and survival, the author suggests that people would not be forced into exploitative labor conditions, and the need for coercive state intervention (e.g., worker cooperatives or redistribution) would be reduced. The emphasis is on freedom of opportunity and the idea that voluntary exchange (even if it involves exploitation in some cases) can still be fair if the parties involved have alternative ways to sustain themselve

Origin of Capitalism

In the following blog, Robert Paul Wolff answers how capitalism started. Taken from: The Philosopher’s Stone

Wednesday, March 5, 2014
A REPLY TO CHRISTOPHER WALSH
Christopher Walsh posts the following interesting question in the comments section of this blog:

dear professor wolff

the fact of primitive accumulation seems a particularly telling criticism of Nozick style justifications of capitalism because it hoists them on their own petard – what is primitive accumulation but a particularly egregious form of coercive property rights violation i.e. theft. I sometimes wonder whether capitalism could be justified if there had been no primitive accumulation and everyone started out with equal shares of resources. Perhaps the appropriate response is that capitalism could never have come into being in such circumstances. What do you think?

I have had my say about Nozick’s book in the article [ Robert Nozick’s Derivation of the Minimal State,”Arizona Law Journal, 1977 ]archived at box.net [follow the link at the top of this page], so I shan’t repeat myself here. But the larger question about the conditions under which capitalism came into existence, or could come into existence, is worth some discussion, because it is an opportunity to expose a fundamental defect in the style of thinking characteristic of those of all political complexions who defend capitalism.

It is of course obvious that in some sense everyone did start with equal shares of resources, if we go back far enough to a time when there were no property rights at all, no law, no organized society, indeed perhaps no homo sapiens sapiens, but just bands of homo neanderthalensis. But let us for a moment engage in the kind of “thought experiment” that anarcho-capitalists, libertarians, and other such-like lovers of capitalism so favor, and which is Bob Nozick’s stock in trade. Imagine a society of men and women in which everyone farms a plot of land or plies a trade, and in which, on market day, they all gather in the town square to exchange what they have produced for what they need: potatoes for shoes, cloth for chickens, hats for strawberries, and so forth. How might capitalism as we know it emerge out of this idyllic starting point? Well, one imaginative chap who had read a little Friedrich Hayek or Milton Friedman on a rainy day, might step forth in the town square and in a loud voice announce that he is prepared to hire some sturdy lads and lasses to work a good plot of land he has located. The land should yield a thousand bushels of wheat a year, he says, and he is prepared to give the ten farmers he seeks to hire fifty bushels of wheat a piece for their labor [numbers for illustration only — I am a philosopher, so I haven’t a clue how much wheat one farmer can grow in a year]. Everyone looks at him as though he had lost his senses. “Why on earth should we give you half of the crop we raise with the sweat of our brows and the pain of our backs?” they want to know. “Well” he says, I had the idea first, and besides I found the land, so I have decided to take half the crop for myself.” The poor sap gets no takers, and goes back to the library [they do have libraries] to see whether he can find another book that will give him the clue to becoming a capitalist.

First he tries some old Puritans, who preach the virtues of discipline, self-sacrifice, and the deferral of gratification. Apparently the secret to becoming a capitalist is to live a life of self-denial and carefully put to one side a part of every year’s crop, or a portion of every year’s pile of shoes — whatever happens to be one’s way of making a living. So he tries this, and sure enough it seems to work. After a year of hard farming labor, he sets aside ten of the one hundred bushels of wheat he has grown, which he exchanges for some additional tools and better seed. Year after year, he keeps at it, and he does indeed prosper, so much so that he is visibly better off than those of his fellows who are less able or willing to engage in disciplined self-denial. But he still does not have anyone working for him, because whenever he tries to hire some chaps to farm his land, he finds that he must either offer them the full product of their labor, which doesn’t do him any good whatsoever, or he must offer them less than the product of their labor, in which case they laugh at him and go back to their own land.

Well, twenty years go by, and our aspiring capitalist is getting on in life, so he decides to go back to the library for one last search of the available books. There he stumbles on a copy of Capital, and after he has plowed through the mysterious and quite unhelpful discussions of the fetishism of commodities and the working day [what, he wonders, are factories], he comes upon Part VIII “The So-Called Primitive Accumulation.” The heavens open, the angels sing, and he realizes that he has found the Promised Land. Off he goes back to his village, where he proceeds to use the little bit extra he has saved by his rigorous self-denial to hire a few bully boys who prefer beating up farmers to working the land. They pretty quickly drive the hard-working farmers from the good land, and stand ready to guard it for its new owner, our capitalist hero. Now, when he goes to the square and offers to pay fifty bushels of wheat for enough work to produce one hundred bushels of wheat, the dispossessed farmers, driven from their land, have no choice but to accept his offer. Agricultural capitalism has arrived. Can financial capitalism be far behind?

Modern-day apologists for capitalism simply assume without explanation that a few people will own the means of production — the state standing behind them to protect that ownership with the full force of law and police — while the many have nothing but their labor and are therefore forced to sell that labor to the owners of the means of production for a wage. These apologists focus all their attention on the wage bargain struck in the labor market, worrying endlessly about whether it is a bargain “freely arrived at,” without ever really asking themselves how the participants in the wage bargain came to be in the situation that defines their relative bargaining power.

To answer Christopher Walsh’s question simply, capitalism never develops out of a situation in which everyone has an equal share of the resources, unless first a process of expropriation and primitive accumulation has taken place.

Max Weber’s definition of capitalism

I keep repeating that the necessary condition for capitalism is the political prohibition of people to a free access to subsistence land. And as I scour the Internet to see who else currently says this, I do not find anyone. There are many people who recognize and condemn the bad symptoms of capitalism, but doing this does not tell us what capitalism is. The only recent scholar who had zeroed in on the nature of capitalism was G. A. Cohen, whose insightful talk I have posted and transcribed here: Criticism of Capitalism by G. A. Cohen, reflecting on Al Capp’s creature, the Shmoo.

However, scouring past literature, I find Max Weber’s characterization of capitalism totally in agreement with mine. The only comment that I wish to add to his analysis is this. Weber was interested in characterizing, what he called “rational capitalism.” This is the sophisticated capitalism which exists with bookkeeping and calculations. However, cruder forms of capitalism also exist. And both kinds are captured by his fifth characteristic — the existence of “free laborers.” These are people who have no free access to subsistence land.

Below is the relevant chapter from: Max Weber, General Economic History (1923, English translation, 1927)

[275]

PART FOUR

THE ORIGIN OF MODERN CAPITALISM

CHAPTER XXII

THE MEANING AND PRESUPPOSITIONS OF MODERN CAPITALISM

Capitalism is present wherever the industrial provision for the needs of a human group is carried out by the method of enterprise, irrespective of what need is involved. More specifically, a rational capitalistic establishment is one with capital accounting, that is, an establishment which determines its income yielding power by calculation according to the methods of modern bookkeeping and the striking of a balance. The device of the balance was first insisted upon by the Dutch theorist Simon Stevin in the year 1698.

It goes without saying that an individual economy may be conducted along capitalistic lines to the most widely varying extent; parts of the economic provision may be organized capitalistically and other parts on the handicraft or the manorial pattern. Thus at a very early time the city of Genoa had a part of its political needs, namely those for the prosecution of war, provided in capitalistic fashion, through stock companies. In the Roman empire, the supply of the population of the capital city with grain was carried out by officials, who however for this purpose, besides control over their subalterns, had the right to command the services of transport organizations; thus the leiturgical or forced contribution type of organization was combined with administration of public resources. Today, in contrast with the greater part of the past, our everyday needs are supplied capitalistically, our political [276] needs however through compulsory contributions, that is, by the performance of political duties of citizenship such as the obligation to military service, jury duty, etc. A whole epoch can be designated as typically capitalistic only as the provision for wants is capitalistically organized to such a predominant degree that if we imagine this form of organization taken away the whole economic system must collapse.

While capitalism of various forms is met with in all periods of history, the provision of the everyday wants by capitalistic methods is characteristic of the occident alone and even here has been the inevitable method only since the middle of the 19th century. Such capitalistic beginnings as are found in earlier centuries were merely anticipatory, and even the somewhat capitalistic establishments of the 16th century may be removed in thought from the economic life of the time without introducing any overwhelming change.

The most general presupposition for the existence of this present-day capitalism is that of rational capital accounting as the norm for all large industrial undertakings which are concerned with provision for everyday wants. Such accounting involves, again, first, the appropriation of all physical means of production — land, apparatus, machinery, tools, etc. as disposable property of autonomous private industrial enterprises. This is a phenomenon known only to our time, when the army alone forms a universal exception to it. In the second place, it involves freedom of the market, that is, the absence of irrational limitations on trading in the market. Such limitations might be of a class character, if a certain mode of life were prescribed for a certain class or consumption were standardized along class lines, or if class monopoly existed, as for example if the townsman were not allowed to own an estate or the [277] knight or peasant to carry on industry; in such cases neither a free labor market nor a commodity market exists. Third, capitalistic accounting presupposes rational technology, that is, one reduced to calculation to the largest possible degree, which implies mechanization. This applies to both production and commerce, the outlays for preparing as well as moving goods.

The fourth characteristic is that of calculable law. The capitalistic form of industrial organization, if it is to operate rationally, must be able to depend upon calculable adjudication and administration. Neither in the age of the Greek city-state (polis) nor in the patrimonial state of Asia nor in western countries down to the Stuarts was this condition fulfilled. The royal “cheap justice” with its remissions by royal grace introduced continual disturbances into the calculations of economic life. The proposition that the Bank of England was suited only to a republic, not to a monarchy, referred to above (page 265) was related in this way to the conditions of the time. The fifth feature is free labor. Persons must be present who are not only legally in the position, but are also economically compelled, to sell their labor on the market without restriction. It is in contradiction to the essence of capitalism, and the development of capitalism is impossible, if such a propertyless stratum is absent, a class compelled to sell its labor services to live; and it is likewise impossible if only unfree labor is at hand. Rational capitalistic calculation is possible only on the basis of free labor; only where in consequence of the existence of workers who in the formal sense voluntarily, but actually under the compulsion of the whip of hunger, offer themselves, the costs of products may be unambiguously determined by agreement in advance. The sixth and final condition is the commercialization of economic life. By this we mean the general use of commercial [278] instruments to represent share rights in enterprise, and also in property ownership.

To sum up, it must be possible to conduct the provision for needs exclusively on the basis of market opportunities and the calculation of net income. The addition of this commercialization to the other characteristics of capitalism involves intensification of the significance of another factor not yet mentioned, namely speculation. Speculation reaches its full significance only from the moment when property takes on the form of negotiable paper.

Free Access to Subsistence Land = Socialism

If Socialism is to be viewed as the antithesis of Capitalism, then the following must serve as foundational axioms of each. Socialism is a political system which allows (i.e., gives a right to a) free access to subsistence land. Capitalism is a political system which does not allow (i.e., forbids) a free access to subsistence land.

Why is this important? Because human beings are animals, and all animals must eat to live. And all animals get their food from their environment, as do all foraging human beings and those who have learned to cultivate their source of food. But with the establishment of States and industrial production, humans have been driven into cities, which Desmond Morris, in the following video views as Human Zoos.

Whether such laws allowing or denying free access to subsistence land are enacted by a single individual (a monarch, a dictator, a president, a prime minister) or a group (a parliament, a congress, a council) is irrelevant.

How power is exercised (i.e., who grants or denies this right) is a different question from whether you are granted this right or not. And one answer to this question of power is given by the word “democracy.” But I distinguish Mass Democracy in which thousands and millions vote for some official (as is practically a universal political practice), from Micro Democracy where the units of government are about 150 voters. A federated Micro Democracy is the ideal of theoretical Anarchism (as expounded, for example, in Proudhon’s The principle of federation, 1863.)

Three forms of slavery: chattel slavery, serfdom, and wage-slavery

 

 

Philosophers often use thought-experiments for the clarification and testing of theories. For example, to clarify and justify the present political institutions, philosophers appeal to a Social Contract. This is an imaginary agreement among an imaginary group of people with imaginary traits. Several years ago John Rawls wrote A Theory of Justice appealing to such a Social Contract.

A thought experiment is a species of hypothetical reasoning. It is the testing of a hypothesis under imaginary circumstances.

I propose to use a thought experiment concerning two individuals on an island, whom I will call Robinson Crusoe and Friday. And my task is to characterize the economic-political systems of slavery, feudalism, and capitalism as a relation between two individuals.

Slavery will exist if Crusoe forces Friday to do anything he wants him to do. Friday will fish, hunt, and gather plants. He will bring them to Crusoe and prepare and cook these things for him. He will build for Crusoe a hut, he will fetch water, and he will wipe Crusoe’s butt. Crusoe, in turn, will allow Friday to feed on the scraps which are left over. If Friday misbehaves, he will be punished by the whim of Crusoe.

Feudalism will exist if Crusoe lets Friday fend for himself on the island, i.e., Friday may build himself a shelter and keep a store of food for himself, provided that Friday brings to Crusoe a certain quantity of food, and does a certain amount of labor.  Crusoe will set up some form of punishment for non-compliance.

The creation of a capitalist situation on the island is initially puzzling to formulate because of mistaken definitions of what capitalism is.  A useful way of giving a definition is through the method of genus and difference. Capitalism is in the genus of trade: it is a market economy. But trade is just barter with or without money, and is well nigh universal.  It existed under slavery and under feudalism.

So called anarcho-capitalists say that capitalism is free trade under conditions of private property.  How will that be modeled in the Crusoe-Friday scenario? We can suppose that Crusoe and Friday have divided between themselves the island in half.  They do not trespass on each other, and periodically trade.  Crusoe is good at fishing, while Friday is good at gathering coconuts. There is an agreed division of labor and trade. This satisfies the anarcho-capitalist’s definition, but it is not the capitalism which socialists were objecting to. What is missing? Wage-labor.  So if there is to be “voluntary” labor by Friday for Crusoe, what possibly can induce Friday to work for Crusoe, given that they possess equal shares of the island?

One scenario is this. Crusoe has a rifle and there are feral pigs on the island. Using the rifle, it is easy to kill pigs. So, Crusoe makes a deal with Friday, allowing Friday to do all the pig hunting for the two of them.  As a result, Crusoe has leisure, while Friday does the work of hunting.

This, however, does not model historical capitalism. Why? Because under present day conditions of capitalism, if Friday does not enter into this agreement as a worker, he will become homeless and risk starvation. How can such a situation be modeled on the island? I can think of only one scenario. Crusoe claims the whole island as his private possession, and Friday is welcome on the island on the condition that he will work for Crusoe. What is the alternative for Friday if he refuses? He is compelled to leave the island in whatever way he can manage, and risk the perils of the sea.  Alternatively, Friday can, of course, trespass without Crusoe’s permission; but if caught, there will be punishment.

So, Friday is forced into working for Crusoe because he does not have free  access to subsistence land on the island.  This, as I see it, is the difference which must be added to the genus of trade in order to define capitalism per genus and differentia.

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chatGPT evaluates:

This thought experiment provides a useful framework for comparing slavery, feudalism, and capitalism as economic systems, with each system defined by its distinct form of coercion and control over labor. Here’s an evaluation of each system and the insights they offer:

1. Chattel Slavery

  • Characterization: In this model, Friday is entirely at Crusoe’s mercy, with no autonomy over his labor or life. Crusoe’s power is absolute, and Friday’s survival depends entirely on the whims of his master.
  • Key Features:
    • Total control over the labor and body of the enslaved.
    • No formalized rights or protections for Friday.
    • Punishment is arbitrary and based solely on Crusoe’s preferences.
  • Economic Insight: Chattel slavery represents the most extreme form of labor exploitation, where the enslaved are dehumanized and treated as property. It highlights the absence of individual autonomy and the complete subjugation to another’s will.

2. Feudalism (Serfdom)

  • Characterization: Friday retains some autonomy. He can maintain his own subsistence, but only if he fulfills certain obligations to Crusoe, who enforces compliance through punishments.
  • Key Features:
    • Partial autonomy: Friday has access to some resources for his own use but owes labor or tribute to Crusoe.
    • Obligations are fixed and not subject to change based on whim, unlike in slavery.
    • Punishment is systemic rather than arbitrary.
  • Economic Insight: Feudalism introduces a system of mutual obligation but remains exploitative. The serf has limited freedom and is bound to provide surplus labor or goods to the lord, who holds power through control of land.

3. Capitalism (Wage Slavery)

  • Characterization: Crusoe claims ownership of the entire island, forcing Friday to work for him under threat of eviction or starvation. Friday’s “choice” to work for Crusoe is coerced by his lack of alternatives.
  • Key Features:
    • Formal freedom: Friday is not legally bound to Crusoe but lacks viable alternatives to survive.
    • Private property rights grant Crusoe control over access to subsistence, creating dependency.
    • The system is maintained through structural coercion rather than direct force.
  • Economic Insight: Capitalism, in this framing, reveals how economic dependency can function as a form of coercion. Despite the nominal freedom of the worker, structural inequalities and property rights compel labor under exploitative conditions. This highlights the core critique of capitalism as a system where “freedom” is constrained by material realities.

Comparative Evaluation

The experiment demonstrates how each system, though varying in its mechanisms, relies on coercion to extract labor:

  • Slavery uses outright force and ownership.
  • Feudalism relies on structured obligations tied to land access.
  • Capitalism, while ostensibly based on voluntary exchange, introduces structural coercion through property relations and economic necessity.

This analysis aligns with Marxist critiques of capitalism, emphasizing how wage labor under capitalism, despite its formal freedom, replicates coercive dynamics in subtler forms. The thought experiment is effective in illustrating how different systems impose economic dependence and restrict genuine freedom.

4o

Why I am not a Marxist

Richard Wolff, whom I admire, calls himself a “Marxist economist.” I find this puzzling and odd. Why?
Because calling oneself a Marxist, suggests that one is a disciple, just as calling oneself a Christian suggests that one is a follower of Christ. It also suggests that one has devoted a considerable time to the study of Marx or Christ. But having devoted a considerable time of study about a person and their teachings, does not imply that one agrees with these teachings. One could very well be a staunch critic. Let us distinguish the latter by calling such a person a Marx or Christ scholar, as contrasted with someone who believes that everthing that Marx wrote or everything that Christ preached is true and worthy of emulation. So, what is a “Marxist”? A Marx-scholar or a disciple?

Now, why is it that if one agrees with the findings of scientists such as Galileo, Kepler, or Newton, one does not call oneself either a Galilean, a Keplerian, or Newtonian, even though one agrees with some of their findings, and can even claim to be a scholar of these men?

Perhaps it has to do with the nature of their writing. Scientists want to find the truth about the universe, while religious figures, such as Christ, Abraham, Muhammad, Zoroasted, prescribe a way of life.

So the question becomes: was Marx a scientist, a prescriber, or both? And calling oneself a Marxist makes some sense if Marx offered prescriptions.

I am not a Marx scholar; so my knowledge of what Marx wrote is limited. But I have read some of what Marx wrote as well as some of what Marx scholars have written. And my understanding is that Marx — on the basis of his analysis of the nature of capitalistic production — predicted that capitalism will self-destruct. And his prediction was based on an idealized version of capitalist production. But given that he did not include the various deviation from his model of capitalism, his prediction in the short-run did not occur, but it is still too early to say that even a modified version of capitalism will not self-destruct.

Richard Wolff, who calls himself a Marxist economist, is perpetually looking not only at the short-comings of capitalism, but also at its cruel repercussions on the environment and humanity. I too see the evil and injustice of capitalism, but I am also more cynical than either Wolff or Marx. I do not anticipate the self-destruction of capitalism, but the destruction of humanity as such.

Although I am not a Marxist either as a disciple or scholar, I find the truth about capitalism spelt out superbly in the last part of Capital I: Part III: The so-called Primitive Accumulation (pp.713-74).

In my own words: It is through conquest that the State arose giving rise to a class division between the rulers and the ruled. This took several forms. The rulers took tribute and taxation; the ruled became slaves, serfs, or free-laborers. And underlying all these relations was the fact that the rulers controlled access to land. [For some reason Richard Wolff focuses on the employer-employee relation, but refrains from examining how such a relation arose in the first place or how it is possible.]

Why I am for entrepreneurs, but not for capitalism

Does this sound like a contradiction? This is due to a linguistic ambiguity. On the one hand, there is a usage in which the owner of a business, i.e., the employer, is referred to as a “capitalist.” But, on the other hand, capitalism is considered as an economic market system. Let us distinguish between a business owner and someone who ideologically supports the capitalist system. Thus, let us refer to the owner of a business as “capitalist1” and the supporter of a capitalist system as “capitalist2.” Once this distinction is made, it is clear that a capitalist1 may not be a capitalist2, i.e., a business owner may not support the capitalist system.


But to properly understand this distinction, it is necessary to understand the nature of capitalism. And the easiest and clearest way is to note the difference as to how “primitive” or “stateless” people live and the rest of the modern world. And the difference is that primitive and stateless people have a free access to subsistence land, and the rest of us do not.

The consequence of this deprivation of access to free subsistence land is that we have to enter into a market economy. This is the essence of capitalism, and its proper name should be, as George Bernard Shaw advocated, “proletarianism.” It is a system which creates a class of people dispossessed of access to free subsistence land and forces them to be workers for others.

Given this predicament of having to enter the market, one can do so by becoming an entrepreneur, an owner of some business, rather than as an employee. A business owner may or may not like the capitalist system, but he, as everyone else, is forced into the market economy.

I think the complaint of employees is not against employers in general, but against employers who “exploit” them, meaning that they mistreat them. And what does this mean? It means that the employer can make their lives better, but deliberately does not because he can have a greater profit for himself.

Let us remember that the employer himself is caught up in the capitalist system and his business must be successful so that he can hire workers.

Some employers are very kind to their workers. One famous example of this is the textile factory at New Lenark in Scotland run by Robert Owen at about 1817. Let us call him a philantropist.

Some employers, on the other hand, are ruthless. A famous example of this is George Pullman. He owned a company town near Chicago for workers at his Pullman sleeping railroad car company. Unlike Owen who tried to provide welfare programs for the workers, Pullman tried to squeeze as much as he could out of the workers, which led to a strike in 1894 which had a national impact.

Two Foundations of Capitalism

Capitalism is best understood as a method to create a pool of people who must work to survive (proletarians). This method — carried out by the State in the form of laws — is twofold: (1) forbid free access to subsistence land, (2) introduce a property tax. [The British in Africa called it a “hut tax.”]

The consequence is that even after buying a property and getting rid of a mortgage on the property, no one can live on such a property for free because there is a rent to be paid to the government — a property tax.

I came across an interesting article explaining the origin of property taxes:

Alana Semuels, “The Feudal Origins of America’s Most-Hated Tax,” The Atlantic, August 24, 2016.

Her source of information seems to be:

Jonathan R. T. Hughes, The Governmental Habit Redux: Economic Control from Colonial Times to the Present, 1991.