How could it be when from its very conception it relied upon the state?
What better examples are there for capitalist ventures than the chartered companies of the 16th - 20th centuries?How is a company that has a monopoly on trade with a certain area for well over a century an example of a free market enterprise? I don't know, but it certainly is an example of capitalism.
The Origins of Capitalism
And for more periodic bloggings by moi,
Leftlibertarian.org
Listen to or read Rothbard's Conceived in Liberty. The first few chapters review the history of mercantilism. Mercantilism may be a form of capitalism, but all capitalism is not mercantilism. To the extent that mercantilism is not free market enterprise, you are correct.
Blast mercantilism all you want. I doubt you will find many defenders of state granted monopoly privilege here.
It's all a definitions-game.
Most people who support free-markets and capitalism view "free-market" and "capitalism" as synonyms (myself included). You may have a different definition of those two words; just keep in mind that people who refer to themselves as "capitalists" don't mean what you mean.
Don't allow leftists to play games with definitions! Some of the libertarian-leaning leftists at this forum will try to redefine "left-wing" back to its original defition (Third Estate, limited government, free-markets, laissez-faire reforms, etc.). Fine! We non-leftists can't stop them from using their own personal definitions; they can use whatever labels they want to describe any concept they want.However, they have the audacity to then use their personal definition of "left-wing" (remember, the original definition, which is no longer valid) to prove that modern leftists are more libertarian than modern rightists! They will say that libertarianism is "inherently leftist" (again, using the original, no longer valid definition), and use that to insist that we should prefer and side with modern leftists over modern rightists.
Question their motives.
Theres also the question of how state companies should be handled after the state is removed. Should they be taken over by the workers, shares given to citizens, kept by board members etc. Any opinions on the matter?
Another point that is frequently brought up my left-libertarians is how much present corporations benefit implicitly from actions of the state. What Tucker called the "Four Monopolies": land, money, patents, and tariffs. Theres a whole debate on land alone going on in another thread.
Hey, this is a private residence man...
mark111: Theres also the question of how state companies should be handled after the state is removed. Should they be taken over by the workers, shares given to citizens, kept by board members etc. Any opinions on the matter?
I'm not sure it would matter. The companies would go bankrupt from poor management and be liquidated.
I think the risk of trying to impose a solution of that large of a scale out weighs the possible benefits. Almost preferable to write-off the plundered wealth as lost then pollute our fledgling free market with redistributionist ideals. The process reminds me too much of the Marxist strategy of using the State to destroy capitalism then dissolving itself.
Contrary to popular opinion, money does not make more money by itself. The old fortunes would die away quickly, through mismanagement and general increase in world wealth.
But about federal government land, why not just declare it open for homesteading? I don't see how selling it could achieve any better a result.
Peace
I think that giving state companies' shares to employees is the best solution that would leave the fewest people feeling cheated. It's a quick solution that doesn't involve "the highest bidder", so it's much harder for any corruption to squeak in.
We can't undo centuries of taxation and eminent domain, and any attempt at doing so will be met with resistance.
It is true that capitalism is not the free market. Capitalism is much narrower in scope. It is fundamentally an exchange relationship between a capital-owner and salaried employee, whereby the capital owner insures the employee against the risks involved in a particular business. The employee, no matter how badly the business does, is paid the same.
This is why many peasant farmers in the early industrial revolution left their land to go work in factories. Farming posed the risk of bad crops, and when this occured the capitalists offered them solid wages they could rely on to support themselves and their family.
This has the added benefit that capitalist enterprise can take risks that egalitarian enterprises like cooperatives could never afford, and is why capitalist enterprises make the most profit and grow to be the biggest. The inegalitarian nature of capitalism is also why it is and always will be hated by leftists.
The fallacies of intellectual communism, a compilation - On the nature of power
Niccolo:
I define capitalism simply as the social system which uses capital i.e. instruments of production. Now we can qualify it as free market capitalism (which is anarchy) or state corporate capitalism (what we have today). So it doesn't follow that all capitalism is statist.
AnalyticalAnarchism.net - The Positive Political Economy of Anarchism
Capitalism is merely the division between capital and labourers, as far as I understand it, on grounds of efficiency. When this is enforced by a State, it is certainly pernicious. When not, it is the most efficient mode of production known to man.
Ego:I think that giving state companies' shares to employees is the best solution
Keep in mind, a "share" in a company is nothing. When the potential employee is "given" a share, what is actually happening is the employee is taking on extra responsibility of being a supplier. Be ready for a bunch of civil servants who do not want responsibility -- no surprise there!
Have you ever met a capitalist that wasn't in favor in favor of free-market? That's why I think it's silly to use different definitions.
Ego: It's all a definitions-game. Most people who support free-markets and capitalism view "free-market" and "capitalism" as synonyms (myself included). You may have a different definition of those two words; just keep in mind that people who refer to themselves as "capitalists" don't mean what you mean.
Fair enough. But which definition is more correct? Which definition actually plays to the course of historical reality? As far as I can see, every Capitalist has been in bed with government from the beginning of the now understood economic phrase of Capitalism - the Muscovy Company.
Niccolò:As far as I can see, every Capitalist has been in bed with government from the beginning of the now understood economic phrase of Capitalism - the Muscovy Company.
We are all in bed with government, all the time. There is no avoiding it.
Stranger: Niccolò:As far as I can see, every Capitalist has been in bed with government from the beginning of the now understood economic phrase of Capitalism - the Muscovy Company. We are all in bed with government, all the time. There is no avoiding it.
No, we (as in most people) are not directly in patronage with the state in the way that certain corporate elites are. There is no excuse for such patronage as "unavoidable". The average person does not get the special benefits from the state that the corporate elite does. They are not literally in bed with the government because they do not have any meaningful access to the institution itself and the special perks that come with it.
Inquisitor: Capitalism is merely the division between capital and labourers, as far as I understand it, on grounds of efficiency. When this is enforced by a State, it is certainly pernicious. When not, it is the most efficient mode of production known to man.
So, you're defining something that never was, but was invented as a phrase specifically because it existed? My attempts here are to try and convey to you that the word capitalism is not at all a laissez-faire invention. It is economic exploitation, but not because it is free-market, no, specifically the opposite.
When has capitalism ever been absent government intervention or support in some manner or another? I'd have to look at an example where an entire economy was capitalist, but possessed no governance. More importantly though, what were the economic conditions when the term capitalism was created?
Brainpolice: No, we (as in most people) are not directly in patronage with the state in the way that certain corporate elites are. There is no excuse for such patronage as "unavoidable". The average person does not get the special benefits from the state that the corporate elite does. They are not literally in bed with the government because they do not have any meaningful access to the institution itself and the special perks that come with it.
There is no such thing as the corporate elite. The kind of relationship to the government that a Lockheed-Martin has is entirely different from that of a Apple or Oracle.
Blanket condemnations of corporations are collectivist.
Sage: Niccolo: I define capitalism simply as the social system which uses capital i.e. instruments of production. Now we can qualify it as free market capitalism (which is anarchy) or state corporate capitalism (what we have today). So it doesn't follow that all capitalism is statist.
Really? But when first creating the term, which one existed? What was the term used as to describe? From what I can tell, it was what you have today.
As for the question presented by Ego, what capitalist was not free-market.
Henry P. Davison was nothing if not a capitalist.
Stranger: Brainpolice: No, we (as in most people) are not directly in patronage with the state in the way that certain corporate elites are. There is no excuse for such patronage as "unavoidable". The average person does not get the special benefits from the state that the corporate elite does. They are not literally in bed with the government because they do not have any meaningful access to the institution itself and the special perks that come with it. There is no such thing as the corporate elite. The kind of relationship to the government that a Lockheed-Martin has is entirely different from that of a Apple or Oracle. Blanket condemnations of corporations are collectivist.
Says the vulgar "libertarian."Quick, Brainpolice get out. It's the attack of the Torries!
Firstly, I did not make a blanket condemnation of corporations. When I say "corporate elite", I refer to a specific set of private individuals and entities who are directly in patronage with the state. This would include those involved with the federal reserve. Do you deny that there are specific private groups that are in patronage with the state, that recieve rather exclusive special benefits from the state in exchange for political support and obedience? Surely you know enough to aknowledge that certain corporate interests are collusive with government agents and that the current economic system we have is a synthesis between corporate and government control.
Furthermore, yes, I oppose all corporations (as they currently exist) because they are not free market entities. They are legal entities based on a government charter that recieve special privileges. There is no such thing as a modern corporation in a free market, only multiple proprietorships in which the risk is beared internally. Corporate personhood is collectivist or anthropromorphic, as it is treating a collective of private individuals as one person. As such, the individual actors are not treated as being responsible for their actions.
Brainpolice:Firstly, I did not make a blanket condemnation of corporations. When I say "corporate elite", I refer to a specific set of private individuals and entities who are directly in patronage with the state. This would include those involved with the federal reserve.
If they are private individuals and entities, why do you refer to them as corporate?
This is the definition I'm thinking of:
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.
I can't find the exact source of it now, but the word was already in use in that way in the 19th century (the dictionary lists that definition as such anyway.) I doubt Marxists were the first to make use of the word, and besides it has a variety of meanings.
Inquisitor: This is the definition I'm thinking of: an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth. I can't find the exact source of it now, but the word was already in use in that way in the 19th century (the dictionary lists that definition as such anyway.) I doubt Marxists were the first to make use of the word, and besides it has a variety of meanings.
Socialists came up with the name capitalism to describe the system they were against just like Adam Smith came up with the name mercantilism to describe the system he was against.
"I cannot prove, but am prepared to affirm, that if you take care of clarity in reasoning, most good causes will take care of themselves, while some bad ones are taken care of as a matter of course." -Anthony de Jasay
Solid_Choke: Inquisitor: This is the definition I'm thinking of: an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth. I can't find the exact source of it now, but the word was already in use in that way in the 19th century (the dictionary lists that definition as such anyway.) I doubt Marxists were the first to make use of the word, and besides it has a variety of meanings. Socialists came up with the name capitalism to describe the system they were against just like Adam Smith came up with the name mercantilism to describe the system he was against.
But what system were Socialists against? Men like Proudhon were very sentimental towards free markets. Socialism once just meant an opposition to economic exploitation.
How is this possible without a state? I'm not sure.
Well in that case, if "capitalism" was the economic and/or political system of the 19th century that socialism arose to defy, I gladly join with the socialists in opposing "capitalism".
I'm just saying, if the word has already been used to describe the economic system as defined in my above post, I don't see why we should have to concede its usage as many libertarians do with the word liberal.
Well, that is up to you how you define it for yourself. Alas, if you want to have a conversation about something it seems to be a good way to be clear about what one refers too. If you declare an apple a banana and your opponent a cherry a peach, chances are that you argue to the end of life without getting anywhere - given the topic is fruit :-).
So let me try to put a definition about what capitalism is to the discussion.
Capitalism is the use of Capital to achieve individual means.
What is capital? Capital is savings. Because you can not put to production what you do not have, the first question always is, do I consume what i got or save it. Austrains call that time preference. Once you have enough saved you can use those savings to produce something. Bottom line someone who has savings is a capitalist, as she owns Capital, which means the ability to produce something. This is the Capitalist part in economics.
Question is what to produce? Something that makes you better off. This is the entrepreneur part in an economy. Find something that consumers are willing to pay a price that is higher than the cost to produce it.
Now, you have filled your entreprenural function and found such a product that is sought at the market -or so you think.
Next step is to produce it. If you do it by yourself, you start wearing the laborers hat, produce your product and sell it. Hopefully.
The last actor in this system is the consumer. And she is the allimportant. She is the one that decides whether it was worth to save, find a product and to produce it, by deciding if she is willing to pay an adequate price. That means if she is willing to give you some of her savings because she values what you have to offer more than the amount of her wealth (money) you are asking for.
Now, people can specialize. Some might be good in saving things, because they have a time preference that allow them to save now and earn the fruits later. Those might specialize and provide capital for new endeavors. We call them Capitalists.
Others are best at transfering ideas into reality, in finding ways to make products cheaper, more plenty, invite new products, find new ways to use known resources. Those might focus on this skills and become entrepreneurs.
And last not least, some are very good in the act of producing itself. They specialize as laborers.
Yet, all human beings act in all 4 functions, they save, they put ideas into reality, they produce and they eventually consume.
This very system is the only one that can provide prosperity for all involved.
In the begining there was nothing, and it exploded.
Terry Pratchett (on the big bang theory)
Fair enough, nhaag. I do not accept that as the definition of capitalism, but I can concede the points.
Niccolò: Fair enough, nhaag. I do not accept that as the definition of capitalism, but I can concede the points.
What ingredients do you consider have to be added to make it up to capitalism?
nhaag: Niccolò: Fair enough, nhaag. I do not accept that as the definition of capitalism, but I can concede the points. What ingredients do you consider have to be added to make it up to capitalism?
Well, I'm always big on context and origins, so I look first to the origin and the context of the word to get my understanding of its definition. I can understand your points, however, and they make sense. I just think in a more dialectic tone, I guess.
JonBostwick: I'm not sure it would matter. The companies would go bankrupt from poor management and be liquidated.
Im just worried about some inequalities that workers might suffer temporarly as a result of the capital accumulation that occured under the state sanctioned system. Although I agree, it would probably vanish pretty quickly.
JonBostwick: But about federal government land, why not just declare it open for homesteading? I don't see how selling it could achieve any better a result.
I am in favour of this, absolutely.
Fair enough. I am new to this community and I need to adopt a bit so bare with me.
So here would be the austrian definition, or Mises definition what capitalism is.
Captialism is a system where private ownership and control over all means of production exist.
This definition rules out all interventionalism, corporatism, mercantelism etc.
Mind that it does not say private ownership alone, but private ownership and control.
Have a great day
Yes, that would be what Mises would define capitalism as, and this is perfectly fine. I, however, do not think he defines it correctly, but that's just me.
nhaag: Fair enough. I am new to this community and I need to adopt a bit so bare with me. So here would be the austrian definition, or Mises definition what capitalism is. Captialism is a system where private ownership and control over all means of production exist. This definition rules out all interventionalism, corporatism, mercantelism etc. Mind that it does not say private ownership alone, but private ownership and control. Have a great day
I think the idea of private "ownership" without "control" is ridiculous.
Niccolò: Yes, that would be what Mises would define capitalism as, and this is perfectly fine. I, however, do not think he defines it correctly, but that's just me.
In order to move this discussion to the question of whether capitalism can exist without the state, you must provide the group with your definition of the term. You have not responded to this request and your original post provides no definition of the term. It is clear that you are stating that the Muscovy Company is "the" example of a capitalist organization. However, you do not tell us why.
Please enlighten us of your definition including the source of the term and how it is intended to be used. If you would like to convince us that the term "capitalism" is per se anti-free market, you have to provide a logical explanation.
Ego: I think the idea of private "ownership" without "control" is ridiculous.
It is in fact. Yet, that did not prevent the fascist Italy and Germany to do exactly that. Oh, and by control I mean total control. From that point of view there seem to be no state that really ensures that right, maybe Lichtenstein.
To me and from how I understand the austrian school the Muscoy Company is "the" example for a mercantilist organization.
The reason is that the Company got a privilege from the state which in turn is a coercive hampering of the free market.
Ironically, the term capitalism, though of unkown origin, arose to be used in it's current institutional meaning in the middle 19th century when it was used by socialists to emphasize the role that private property played in the "exploitation of labor". The term I prefer is Free Enterprise.
wuzacon: In order to move this discussion to the question of whether capitalism can exist without the state, you must provide the group with your definition of the term. You have not responded to this request and your original post provides no definition of the term. It is clear that you are stating that the Muscovy Company is "the" example of a capitalist organization. However, you do not tell us why. Please enlighten us of your definition including the source of the term and how it is intended to be used. If you would like to convince us that the term "capitalism" is per se anti-free market, you have to provide a logical explanation.
Um... Actually, I have.
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Capitalism is not free market... How could it be when from its very conception it relied upon the state?
Capitalism is not free market...
How is a company that has a monopoly on trade with a certain area for well over a century an example of a free market enterprise? I don't know, but it certainly is an example of capitalism.
Why is this an example of the capitalist organization? Because this is what people have been calling capitalist since capitalist was a name. I don't really care what you wishfully want to call capitalism - I don't know why you want to call it that either, but ok - I care what capitalism has actually been defined as, and not through the eyes of a an that simply wanted to embrace a term his opponents laid upon him, but through the actual dialectical context of the day.
Ask PJ Proudhon to give you an example of a capitalist. Now, he may not give you an example of an executive in the Muscovy Company, but he certainly wouldnt give you an example of a baker, a butcher, or a candlestick maker.
Why does this matter at all?
Unlibertarian: Why does this matter at all?
While this particular discussion seems to revolve largely around semantics, it is an important issue. People too often look at so-called capitalist (interventionist would be more accurate) economies and equate them with truly free markets. Problems that result from the intervention are erroneously blamed on "market failures", which are used to justify further interventions.