I reject the term “capitalism”. Why? Because I believe the term is based on a false assumption. It assumes that it is a system that was designed. It is not. It’s just an emergent phenomenon.
Here’s a question. Can you tell me who invented capitalism? Some call Adam Smith the “father of capitalism”, but this title is extremely misleading. When Adam Smith described the Invisible Hand of the economy, he didn’t create something new. He identified and described something that was already there.
What are the so-called core tenets of capitalism? Here are some:
- Private property
- property rights
- capital accumulation
- profit motive
- voluntary exchange of value
- division of labor
Is there a single thing in this list that we can confidently say hasn’t existed since antiquity? Profit motive maybe? Yeah that’s a riot. Let’s read silly excerpt from the Wikipedia page History of Capitalism.
While trade has existed since early in human history, it was not capitalism. The earliest recorded activity of long-distance profit-seeking merchants can be traced to the old merchants active in the 2nd millennium BCE. The Roman Empire developed more advanced forms of commerce, and similarly widespread networks existed in Islamic nations. However, capitalism took shape in Europe in the late Middle Ages and Renaissance.
This is a fantastic example of the No true Scotsman fallacy. “Sure we’ve had economic trade that sure looks a lot like capitalism dating all the way back to the Roman empire, but that’s not true capitalism.*”
Well then, if that wasn’t capitalism, then what was the difference? The wikipedia article just goes on to completely ignore that obvious question. Well fine let’s examine it ourselves. Did Roman citizens have private property? Yes. Did they have legal rights to their property? Yes. Did they accumulate wealth. Yes. Were they motivated by profit? Of course. Did they engage in voluntary exchange of value (a.k.a. selling stuff). Yes. Did they hire laborers? Yes.
What pray tell is the difference?
When Was Socialism Invented
When was Socialism invented? This question is far easier to answer. Sure, it was an idea that evolved over time. Sure there wasn’t just one person that invented it. Sure it was a complex movement involving many people with opposing ideas across continents and decades. But it is still extremely unambiguous which century it emerged.
1600’s: Socialism doesn’t exist and has never existed. 1700’s: Meh. May there are some people saying things that we might call socialistic today. 1800’s: Damn there sure are a lot of socialists on planet Earth!
Socialism is a relatively new idea. It did not exist in antiquity. Not only that it is explicitly about ending a prior status quo and ushering in a new status quo.
Hitherto, every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class, certain conditions must be assured to it under which it can, at least, continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the commune, just as the petty bourgeois, under the yoke of feudal absolutism, managed to develop into a bourgeois. The modern laborer, on the contrary, instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident, that the bourgeoisie is unfit any longer to be the ruling class in society, and to impose its conditions of existence upon society as an over-riding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him. Society can no longer live under this bourgeoisie, in other words, its existence is no longer compatible with society.
- The Communist Manifesto by Karl Marx and Friedrich Engels
But That’s Communism, Not Socialism!
Getting into a semantics debate is a fantastic way to waste time and detract from the subject. But of course, you can’t talk about the subject of socialism without mentioning communism and vice versa. And of course, once again we encounter the No true Scotsman fallacy when we hear so many people object “Well that’s communism, not socialism.” Let’s put to rest this waste of a time argument by asking one of the very authors of the Communist Manifesto.
Thus, Socialism was, in 1847, a middle class movement, Communism a working class movement. Socialism was, on the Continent at least, “respectable”; Communism was the very opposite. And as our notion, from the very beginning was, that “the emancipation of the working class must be the act of the working class itself,” there could be no doubt as to which of the two names we must take. Moreover, we have ever since been far from repudiating it.
- Friedrich Engels in the Introduction to The Communist Manifesto.
Engels makes it very clear in this sentence and the surrounding context that the name of the communist movement simply changed to a socialist over time. They realized that communist was a term that was politically unpopular, and socialist was a term that was viewed more favorably, and they made a conscious effort to switch names1.
There is no consistent, significant difference between socialist ideology and communist ideology. There may be conflicting interpretations and schools of thought, but they all stem from a common ancestor, and share core beliefs.
Capitalism Is Just Human Nature At Scale
Now that socialism/communism has effectively derailed the conversation, let’s try to get back to the topic at hand.
Capitalism is just human nature at scale. Humans have stuff. Some humans have other stuff. And sometimes those humans trade with each other. It’s not rocket science. Nobody sat down and invented it. It’s just an emergent phenomena. Humans have a very strong tendency to want more stuff. What happens when you want more stuff but you don’t have that stuff? You problem solve.
And historically many people have solved this problem in many different ways. Sometimes they solved this problem by taking stuff by force with violent military conquest. They turned into feudal warlords. Well, that strategy might work for a time but if you take too much stuff from the people, after awhile they get sick of it and start an uprising. (For example the several slave rebellions of the Roman empire). Rulers have known for thousands of years that if you are too harsh on your subjects, then you risk your own life.
So other times rulers try other tactics. In order to placate the masses from uprising, they give them freedoms, rights and even property. (Often, the property already belonged to the people, but the ruler just decided not to steal it.) The rulers even gave away tons of free stuff. Pablo Escobar built schools for the poor. The United States give aid to countries all over the world. If you believe that these actions are always generous and selfless, then you’re naive. Perhaps it is some times, thinkers have known for thousands of years that rulers can buy favor to secure power. Machiavelli recorded this in The Prince but rulers had been doing it long before that.
And then of course another way to solve the problem of how to get more stuff is so-called capitalism. But it’s not some complex system that the monopoly man invented in order to screw over the working class. It’s just humans being humans. Some people realize “Hey, that person has stuff that I want. Maybe if I give them stuff that they want, they’ll be willing to give me stuff that I want.” Again. This is not rocket science, it’s just one of many historical patterns of human behavior.
Why I Reject The Term “Capitalism”
By giving this pattern a name, capitalism, we seed the idea that capitalism is some contrived system that was placed on society to subjugate the less fortunate. And if it’s a contrived system, then why don’t we replace it with a new system? Sure the new system is also contrived, but so was the last one, and this new one is so much better. And look how awful that old system “capitalism” is! We have to get rid of it!
This is explicitly the argument of Karl Marx in the Communist Manifesto.
Except capitalism isn’t contrived. It’s not even an economic system. It’s just a pattern of human behavior.
You Say That You Hate Capitalism, But What You Really Hate is Corruption
Many people complain about capitalism, and with good reason. There are so many examples of obscenely wealthy individuals abusing their power to get unfair preferential treatment. But you know what else has obscenely wealthy individuals abusing their power to get unfair preferential treatment? Socialism, communism, feudalism, monarchism and literally any other -ism you can think of.
The problem is not some so-called -ism. The problem is human nature. People are corrupt. Humans treat other humans very poorly. There has never been a period in human history when humans stopped treating other humans poorly. If you think that getting rid of capitalism is going to fix the problem, then evidently you have misdiagnosed the problem entirely.
Footnotes
Footnotes
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Wow! How very capitalistic of them to rebrand themselves! ↩