I had Morning Joe on this morning (don’t ask me why) and I saw Scarborough ripping Gingrich because he had attacked Romney for bankrupting companies and shipping people’s jobs overseas. “Somebody’s gotta defend capitalism,” Scarborough cried, “somebody’s gotta defend the free market! Romney created Staples!!” Now, it’s my understanding that Bain Capital made a seed investment in Staples when it was just one store, and that helped it grow into a very successful chain that employs a lot of people. That’s venture capitalism, and no one is criticizing Mitt Romney for venture capitalism. It’s the vulture capitalism of taking over troubled companies, downsizing them, and/or shipping labor costs to foreign countries where costs are lower that makes people uncomfortable.
Of course, our economy needs scavengers just like the food chain needs them. Without scavengers our roads would be littered with roadkill and our economy would be filled with inefficiencies. But I think we have a right to set some standards and make it a national priority to maintain a manufacturing base in this country. I’m all for capitalism and the free market when we’re talking about the free exchange of goods and services. But when we’re talking about global capitalism that takes no notice of our sovereign interests and the health of our local economies, then I start to have a problem.
I guess what it comes down to is that “capitalism” doesn’t mean the same thing for me as it does for Joe Scarborough. Or, if I accept his definition, suddenly I am not an unqualified supporter of capitalism.
Would you be more accepting of inefficiency if it meant there was no unemployment? Efficiency is fine, but not as a singular virtue.
And remember about Staples: places like it put a lot of people out of work. I worked in a little copy shop after college, and the guy who owned it, a sweet individual, was done in by Staples. Our enterprises are generally sized to demolish small proprietors.
There is a logic to capitalism, and it doesn’t even favor capitalists. It favors capital itself.
Let me add that there’s nothing in your post that makes me think you disagree with my basic premise.
Also! Capitalism is NOT about the free exchange of goods and services. It uses free exchange when free exchange is convenient for accumulation. When it’s not, it uses other means. I would not call what we have in this country free exchange, given advertising, distorted competition because of monopoly or monopolistic enterprise, etc.
well, I think it’s kind of pointless to argue about the definition of the word. I support capitalism as a system in which people invest in business ventures in return for a piece of the resulting profits. I support the widest possible latitude for exchanging your money for products and services and your labor for money, so long as we protect people from environmental costs, workplace hazards, and fraudulent or predatory practices.
It’s not a question of a semantic definition, but a description of what actually happens in our real economy. When I say capitalism is not about free exchange but accumulation, I mean to point to the actual rationale behind concrete decisions of real actors in our economy. The decision of a CEO is not, how will we maintain free exchange systemically, but, how will I (we) grow our capital. There is no great attachment to free exchange. Witness the argument over the Corn Laws in 19th c. England. Witness the privileged status of all kinds of large corporations: that’s not about free exchange in the least, but about tilting the market in one’s own favor through extra-market means, like buying congressmen, or monopoly.
We have an economy that takes as its sole functional virtue–as opposed to its constant rhetorical virtue–the accumulation of capital by any means. We can work with that, but to call it any other way goes off into ideation rather than concrete, social reality.
Exactly.
Interesting that Booman says he doesn’t want to “argue about the definition” of capitalism; then provides his own particular/general definition…
Regarding the hype/hyperbole around terms like “free market”, I prefer Chomsky’s “the free market is for saps” declaration which gets to your point regarding what actually happens in our real economy.
A big portion of what happens in our economy is centralized monopoly capitalism… and this is what Chomsky is getting at; most large U.S. corporations aren’t interested in “competing in the free market”- the profit margin isn’t large enough.
Regarding Gingrich’s (and others) criticism of Romney’s handiwork at Bain Capital, I agree. However, I seriously doubt Gingrich supports anything other than the sort of capitalism we have now.
Actually, I thought it was Alan Greenspan who said that the free market was for saps.
😉
So what is “accumulation of capital”? The participant in this ratrace calls it “financial independence”. At base that means a store of symbols of future claims on production without restraint beyond that of one’s limits on consumption. Symbols in this case being bit in an computer that keeps accounting records of credits and debits and calculate a large positive “net worth”. With counterbalancing accounts in a host of other computers. Plus whatever symbolic value has been attached to those physical goods in one’s possession.
One of the many economies that we have takes that as a virtue. And tries to impose that regime on the other economies. Specifically, over the past century, the household economy has come under the attack of “conveniences” that have reduced its functioning in favor of monetized services. The gift economy becomes a means of corporate marketing. Neither of those have completely disappeared.
I mean it in the M-C-M’ sense that Marx used. The goal of capital is to grow.
Your second paragraph points to precisely why I don’t think it’s over-generalization to talk about capital-ism as a systemic whole. I am aware that this can lead to a defeatism, but I don’t think I go there. My concern is whether or not capitalism broadly put ends by social or natural means. I’m hoping obviously for the former, because the latter will really suck.
I don’t really know what you have in mind for creating full employment. But I’m not in favor of telling people how many employees they need to employ. I’m generally not in favor of propping up failed businesses just to maintain employment, although a helping hand in a temporary crisis can be rationalized.
If we’re talking about the government stepping in to create jobs like was done during the Great Depression, I can support make-work programs. But that’s kind of outside the scope of the capitalist system. It’s more like a social security program, or a safety net.
I’m more noting that unemployment is itself a historical development, associated with capitalism. It’s not something we as a species have had to contend with for most of our history. We tend in this country to elevate efficiency without examining corollary costs. The fact is that I myself would rather employ two people to do work x than one, rather than have one of the two unemployed, bearing in mind profit margins etc.
My dad did some business in China about 20 years ago and was astonished that everyone had a job. They would pay people to do what he called more or less useless jobs. He said this, as a businessman, but he thought it was a good thing. He is a Kansas farm boy, and thinks work is healthy for people. He saw that China’s economy wasn’t tanking from the inefficiency, and that it didn’t really cost too much to pay a low wage to people to simply do something. Inefficient, though.
We imagine–collectively, I’m not specifying you–that efficiency is always a good thing. It’s not.
As to how to get to full employment? I’d go, unoriginally, for massive public works, but also beefing up local infrastructures, including education, food distribution, transportation.
You nailed it though when you noted it was outside the scope of capitalism as a system. We need to be able to function outside of that scope.
There is only one claim of efficiency that stands up for free markets. Markets are the most efficient way to clear the market of goods (services are less clear) through a price system. What “free” would mean would be the price would be free to have a top and a bottom based on supply and demand in a single session of the market.
For full employment, this is irrelevant. Neither the supply of labor nor the demand for labor can be adjusted to function in a market that will clear efficiently. Employment is a feudal patronage relationship, not a marketable commodity. Typically the worker has no negotiating power.
And the arguments that markets improve technological efficiency and innovation are falsified by every technological advance. Canals were subsidized by governments. Railroads would not have been built into a complete system without government construction or subsidies. The same for the electrical grid. Telephones would not have been deployed nationwide without the grant of regulated monopoly to AT&T. Wireless phone technology in the US suffers from a privatized market. The deregulation of airlines, banks, and any number of industries has reduced their technological efficiency.
The increased productivity that companies tout has been productivity per employee, achieved by reducing the number of employees not by increasing efficiency.
All this is spot on, which only highlights the depressing point: increases in productivity have been seized upon by the right as evidence of the superiority of our system vis-a-vis that of, e.g. France.
France…
On an Internet forum I frequent, I posed the question, “What is an economy for, anyway?” Judging from the general reaction, few people ever ask that question. They see capitalism as an end in itself, not a means to an end.
Within the logic of capitalism, it is not a possible question. It’s sort of like Heidegger being the first within the logic of modern European philosophy to ask the question of being. The conceptual vocabulary had disallowed it.
I think the problem is taking anything Gingrich says seriously. Were circumstances different, Newt would be praising Bain as a bunch of job creators, the end.
Capitalism is a belief and value system that money and “markets” are more important than anything else in society.
All economies are mixed economies and always have been. Belief and value systems like capitalism, socialism, corporatism and other -isms try to deform these mixed economies in the name of purity. Generally they reflect mainly the interests of those who promote them.
Mitt Romney is being accused of a lack of purity.
You point to something very important, that we have a conservative movement that, quite the contrary of Burke, is lost in ideas. Bad ideas to boot, but that’s an aside.
What I would say is that no economies are mixed economies, except as a shorthand way to discuss them. All economies are precisely what they are, and our imaginings and typifications about them is only useful to help us make good decisions and understand real things. There is no inherent reality to any of these ideal types, and therefore no inherent reality to any mixing.
I would say that capitalism is not merely a set of beliefs, like liberalism. It’s how things actually work. That doesn’t mean we don’t have beliefs about it, nor that we don’t abstract from its data, which is what every economist from Smith on down does.
I belabor the point because the discussion needs to get to a systemic examination of how our system actually works, so we can identify what works best and build on it.
What works best depends on which “what” you are talking about. Very many things work best when social notions of “ownership” operate. It’s no mystery while health care worked well when hospitals were operated by county governments or charities. And why the health care system in this country no longer works. Or why private prisons have created a nascent police state where they operate. We moved into privatization in both of these cases because of conservative ideas, as you point out.
You are not likely to find a discussion of how the system actually works by beginning in 18th century or 19th century moral philosophy. Nor in the logical positivism of 20th century “scientific” economics and it mathematical elaboration. Nor by getting caught up in discussions about money. And certainly not by listening to politicians.
The best entry point that I’ve found recently to this conversation is David Graeber’s Debt: The History of the First 5000 Years. He lays out a catalog of the various ways people have actually conducted economic activity, as best as anthropologists have worked out.
Even in our supposedly capitalist society, we have gift ecoonomies, non-monetary household economies, cooperatives, local scrips, etc., not to mention the internal economics of corporations, that do not conform to a capitalist model. And the US is linked in economic transactions with societies that have more diverse economic practices.
Precisely put. It’s those various other forms of economy we have that point the way forward.
Very interested in the book, too.