Since it first began to manifest these consequences, people have looked for ways to prevent those disruptive effects from tearing apart the social fabric—like, for instance, the Elizabethan poor laws in sixteenth century England. Ivan T. Berend. What is capitalism? The crucial point here is that market-dependence, and the imperatives of competition that went with it, did not depend on the complete separation of the producers from the means of production. Arguing against explanations of the downturn that blame it on a profit squeeze caused by conditions too favorable to labor, he explores the irreducible contradiction in the relation among capitals which is independent of the relation with labor. To begin with, we have to set aside some false oppositions. I’ve been arguing for a long time that we need to think of the capitalist market not as an opportunity but as an imperative.1I’ve also argued that, as familiar as this idea may seem to Marxists, we haven’t been consistent in pursuing all its implications. The best that socialists can do is to aim as much as possible to detach social life from market-dependence. The other strategy, call it left neoliberalism, assumes that it’s precisely Keynesian tax and spend policies that destroyed productivity and profitability, and propelled the world economy into a prolonged downturn after the postwar boom. If market dependence and market imperatives are in some important ways independent of the relation between capital and labor, what does this add up to politically? "Corporation." To increase their surpluses, exploiters needed to improve not the productivity of the producers’ labor so much as the effectiveness of their own coercive powers of appropriation. "Demand." It is superfluous to speak of “political capitalism” when there is only one kind of capitalism to begin with. At any rate, here we have a historical case in which the market-dependence of producers, with or without wage labor, subjected them to the imperatives of competition. And what we think is possible or impossible under capitalism obviously depends on what we think capitalism is. What I mean is that struggles for social provision and for improvements in the terms and conditions of work need not be based on any problematic assumptions about how capitalism works. So a mass proletariat was the result, not the cause, of those market imperatives. In certain specific conditions, direct producers who were not completely dispossessed were nonetheless market-dependent. It’s not the market instead of class exploitation. Although corporations usually benefit from the politics of resignation, we argue that widespread dissatisfaction with corporate practices represents an important starting point for social change. Some social democratic governments have tried a different approach, in their efforts to give capitalism a “human face.” In addition to enhancing market opportunities, they may try to obstruct, or threaten to obstruct, the opportunities of capital—by measures such as social clauses, or the “Tobin tax”—in order to guide capital into more humane, or at least less destructive, practices.7 But whether they adopt enhancement or obstruction strategies, the underlying assumption remains the same: the operative principle is always market opportunities, while market imperatives are left essentially untouched. To elaborate the historical point, I’ll just refer you to Brenner’s historical work and what he says about the original conditions of market-dependence, though I’m making some connections that he doesn’t explicitly make and drawing some strategic conclusions from them that he doesn’t. If the dynamics of competition can operate even in the absence of any class division between capital and labor, it seems to follow that, where there is such a class division, the underlying competitive dynamic will operate no matter what the configuration of class power may be. Now you might think that Marxists would never say that people were market-enabled in that way. The right to life states that you are sovereign, (your body is your property and belongs to you, i.e., you own yourself) and as such it is proper to take those actions (right to liberty) to legally acquire and use property (right to property) which is necessary to flourish (right to the pursuit of happiness), free from the physical compulsion by other individuals. Under capitalism, a government is an agency with a monopoly on the use of physical force used to protect individual rights. Definition of capitalism : an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market Communism, Socialism, Capitalism, and Democracy Did You Know? Where they may differ in appearance, all forms of statism adhere to the principle that the individual’s fundamental purpose is to be sacrificed for the good of others. At one level all this is obviously true. The capital/wage labor relation characteristic of a mature industrial capitalism, once established, certainly increased the need to revolutionize the technical forces of production, but we can’t understand the emergence of that mature form without understanding the imperatives that preceded it. , Based on the idea that “every individual is properly self-owning, self-governing, and self-reliant,” capitalism “recognizes the right and freedom of each individual to pursue happiness as they see fit as long as they don’t violate the rights of others,” Thompson argues. Capitalism can be defined as an economic system based on private ownership by the use of the means of production and their exploitation for profit. But that’s not the same as understanding what determines the imperatives of competition in the first place. are corollaries or applications of the right to life to varying contexts. All rights reserved. For our purposes, the important point is that he shows how economic units became market-dependent, in historically unprecedented ways, not because of the relation between capital and labor but before the widespread proletarianization of the work-force and as a precondition to it. Collectivism holds that the individual is not an end in oneself, but is a tool to serve the ends of collective; collectivism leads politically to statism. Capitalism, he says, is a system in which “economic units—unlike those in previous historical epochs—must depend on the market for everything they need.”3 His argument then proceeds on that basis, building on the premise that what distinguishes capitalism from all other social forms is the market-dependence of all economic actors, and hence their subjection to the imperatives of competition. We’ve already seen how Brenner refutes those explanations of the downturn that blame it on a profit squeeze by labor. However, this raises a problem: man’s state in nature, where all are allowed complete discretion in the use of force, according to the “laws of the jungle,” is anarchy  — perpetual civil war and gang warfare. Since my own argument here about “non-transformational” politics is based on a conception of market-dependence like Brenner’s, I want to clarify a couple of points before I proceed. But at least a few things are pretty clear. Now these two kinds of politics—the struggle for social provision and the class struggle over the terms and conditions of work—are indispensable under capitalism in all its forms. So we seem to be driven to an odd conclusion: it begins to appear that Keynesianism and neoliberalism are simply two sides of the same coin. But if we acknowledge that there are fundamental and irreducible contradictions, and that they can’t be reached by any such policy interventions, there’s still a lot to be done, well short of socialist transformation, and even if our ultimate objective is socialism. If anything, the reverse is true: the pressure to increase labor productivity brought about the generalized relation between capital and wage labor which we now regard as essential to capitalism. What does the science of ethics have to say about this issue? Let’s take a closer look at the connection between relations of competition among capitals and the relation between capital and labor. Optimistic social democrats and advocates of the “Third Way” think they can achieve some humane kind of competitiveness, while the neo-Keynesian left seems to be suggesting that we can avoid the contradictions of capitalism if only we can strike the right balance in the class relation between capital and labor. The foreign policy of a capitalist government to other countries is identical in principle to its policy towards its citizens: the banning of the initiation of force from all relationships. In addition, the book is a scholarly contribution to the raging discourse on the political economy of the glo­balization of capitalism by the U.S. and the affluent countries of Europe and its implications for the rest of the world." It means that producers and possessors of the means of production, who are not themselves wage laborers, can be market-dependent without employing wage labor. Only capitalism has a system of exploitation in which exploiters depend on the market to gain access to labor power and to realize their profits. The use of force, in and of itself, is not evil; but, to initiate (start) force is evil, as force renders the individual’s mind useless as a means of survival. There are only two ways individuals may deal with each other: by reason (i.e., speech, contract, persuasion) or by force (i.e., physical blows, compulsion, fraud). Where a capitalist society regards the individual as a sovereign being, a statist society holds that the individual’s life belongs to the state, to be sacrificed (altruism) for the good of the collective (collectivism). By adopting policies to stimulate demand, this argument says, it strengthened the position of labor against capital and ended up by squeezing profits, thereby discouraging investment. Another, more oppositional kind of non-transformational politics came with the development of industrial capitalism and with the growth of a mass proletariat: the struggle over the terms and conditions of work. This has led many economists, right and left, to adopt what Brenner calls the “contradictions of Keynesianism” view. NGOism, a 166-page sledgehammer published in July 2011 and wielded against the eight-page Manifesto, which appeared that June, illustrates the political implications of García Linera’s economic model of “Andean-Amazonian” capitalism. It provides state-of-the-art analysis of the character of postindustrial changes, their impact on cleavages and citizen preferences, and how parties fashion winning postindustrial political coalitions behind particular paths of adjustment. True, Grudgeholder Capitalism in the U.S. context may function in a slightly less heavy-handed manner because domestic markets are difficult to hold hostage. If that seems utopian, just consider how unrealistic it is to adopt a strategy of export-oriented competitiveness in a crisis-ridden global economy with an irreducible structural tendency to overcapacity. In other words, capital derives from the appropriation of surplus value produced by workers. | About/Privacy. My main point is simply that there can be struggles and objectives short of a socialist transformation, but there can’t be such a thing as a Third Way. Democratic capitalism, therefore, is a system of three liberties: political liberty, economic liberty, and liberty in religion and conscience, in arts and science, and in cultural expression. On the face of it, these propositions may not seem particularly startling. Individual rights are principles that form the bridge between individual morality and the ethical principles governing society. This kind of market-dependence was a cause of complete dispossession, a cause, not a result, of the expropriation of the English peasantry. To understand the market as imperative, we have to understand not just how people have been able to respond to the capitalist market but how they have been forced to do so. In regards to immigration, a capitalist country secures its borders just like an individual secures their property. And only in capitalism is it necessary to grow just to stay in the same place. The history of capitalism shows that when freedom is applied to personal relationships, the arts, technology, and the sciences, it leads to human flourishing, peace, and progress. We may have no trouble understanding how class and competition are intertwined in a mature capitalist society. A common view, not least on the left today (for example, in the “contradictions of Keynesianism” view) is that too much class militancy is counter-productive, that by undermining the profitability of capital it undermines employment and social provision. Investment in fixed capital allows producers to stay in the market even when lower-cost competitors enter the fray, and they can stay in even at a lower rate of profit. Calling neoliberalism a failure will no doubt seem odd to those who regard the U.S. economy as a brilliant success. Capitalism emerged as a free market economic system in the 16th century. This means struggling for every possible gain within capitalism, without falling into the hopeless trap of believing that the left can do a better job of managing capitalism. These imperatives require strategies that lead to success in market competition—specialization, accumulation, enhancing labor-productivity, adopting low-cost techniques, moving in and out of various lines in search of profit, and so on. Examples of statism include communism, tribalism, (unlimited), theocracy, monarchy, apartheid, (pure) democracy, socialism, nationalism, fascism (corporatism), and all the hyphenated versions of capitalism which are some form of “mixed economy” welfare statism. The apparently inevitable response, then, was a swing of the pendulum to neoliberalism. Great depressions are caused by the government’s monopoly on money, and central banking, and not by capitalism and the free-market. Only capitalist appropriation depends on market competition and therefore on the systematic improvement of labor productivity. It’s not competition instead of accumulation. Before my visit, someone sent me a document entitled “The Current Economic Crisis and its Implications for South Africa,” produced for a “summit” meeting of the governing alliance of the ANC, the South African Communist Party, and COSATU (the Confederation of South African Trade Unions). Capitalism will, needless to say, always and necessarily, mean the exploitation of workers, unrelenting attempts to intensify exploitation, to increase the gains that capital can extract from workers, and this will always, and necessarily, mean a fundamental antagonism of interest between capital and labor. What they never touch is the conditions of market-dependence. It’s not the sphere of circulation instead of the sphere of production. On the contrary, they take those contradictions for granted, dealing with the palpable effects of capitalism, limiting the damage as much as they can, providing safety nets, and when they can’t limit the damage, picking up the pieces. But here things start to get a bit tricky. If we focus on the irreducible contradiction in the relations among capitals, which is there whatever the relations between capital and labor, there really is no reason to place limits on class struggle in pursuit of social protection and workplace advances, and they should be pursued as militantly as possible—both to achieve immediate reforms and to enhance class consciousness and organization for more long-term transformational struggles. Topics: He shows in great empirical detail that the long downturn wasn’t, and couldn’t have been, caused by labor. That’s not a paradox. The successive failures of both strategies reflect the same fundamental reality, which neither is prepared, or able, to confront. Both sides of the equation have to be kept in mind in devising our oppositional politics. But more recently you have many people on the left casting doubt on that kind of policy and, instead, joining the right in adopting neoliberal globalization programs. The point I want to make, then, is that these strategies have failed not for antithetical reasons but for the same reason. Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. I owe this point to Gerard Greenfield, who sent me, by e-mail, an extremely interesting and fruitful argument elaborating in a new way my distinction between the market as opportunity and as imperative, which I hope he will develop and publish. That means striving for the decommodification of as many spheres of life as possible and their democratization—not just their subjection to the political rule of “formal” democracy but their removal from the direct control of capital and from the “impersonal” control of market imperatives, which subordinate every human need and practice to the requirements of accumulation and profit-maximization. Both these strategies have demonstrably failed to overcome the inherent contradictions of capitalism. Capitalism is an economic system in which capital goods are owned by private individuals or businesses. This is why it’s not enough to say, as some of Brenner’s critics have done (including John Foster in the June issue), that the primacy he gives to competition is contrary to Marx, who insists that competition doesn’t cause capitalism’s laws of motion but is simply their external manifestation in the movements of individual capitals. This means, among other things, that the pressure to increase labor productivity wasn’t originally caused by the relation between capital and wage labor. But there is often a great deal of confusion on this point. So let me briefly go over the basic argument again, before moving on to some of its political implications. On second thought, though, maybe it does have the virtue of expressing some kind of reality. Such a society operates under the moral doctrine of individualism — where each individual is regarded as an end in oneself, and not as a slave for the ends of others. “A right,” according to philosopher Ayn Rand “is a moral principle defining an individual’s freedom of action in a social context.”. In what follows, I’ll try to show that, if we always look at capitalism through the lens of market-dependence, much else will become clear —for instance, about the limits of “non-transformational” politics, designed to manage capitalism rather than to transform it. The rational individual requires freedom from coercion, Individual rights are moral principles defining one’s freedom of action in a social context, The purpose of government is to protect the individual’s right to life, by banning the initiation of physical force, Individualism regards the individual as a sovereign being; collectivism as a serf. Capitalism defined. On the other hand, there is a great deal to be done short of a socialist transformation. The terms capitalism and socialism are both used to describe economic and political systems. While the essential idea of political capitalism has a long history, it has not been recognized as a distinct economic system . So that’s the first kind of non-transformational strategy that makes sense within the constraints of capitalism. In a way, both also seem to assume that we just need to strike the right balance between classes. But neoliberalism hasn’t provided the answer either. What I’m arguing instead is that if we understand how capitalist contradictions are independent of class relations, we’ll also understand the critical importance, the indispensability, and the possibilities of militant class struggle. Does this mean that the left should dismiss any politics short of revolution? It’s also obviously true that the general commodification of labor-power is the basic and indispensable condition for generalizing market imperatives. Neoliberals may seek to do it by deregulating markets, while Keynesians subsidize demand. And capitalism’s specific imperatives of accumulation are the consequence of market-dependence. capitalism definition: 1. an economic, political, and social system in which property, business, and industry are…. We can find at least a preliminary answer in today’s dominant economic strategies, which even on the left seem to be based on the principle of market-enablement. And he shows that at the onset of the downturn, labor conditions weren’t that great anyway. While political capitalism as an economic system has barely been recognized, the building blocks that form a theoretical foundation for political capitalism are firmly in place and well-accepted. Education is the means of providing a child with the knowledge they require to become an independent, self-sustaining, rational adult. “Offering an ambitious lens through which to view the politics, temporalities, spaces, and struggles that constitute contemporary capitalism, Sandro Mezzadra and Brett Neilson creatively conceptualize the problems and possibilities that emerge out of the current moment's multiple forms of crisis. And that historical insight has wider theoretical implications. About Religion and the Rise of Capitalism. The unavoidable conclusion seems to be that capitalism’s contradictions are irreducible, and nothing short of abolishing capitalism itself will do the trick. Subscribe to the Monthly Review e-newsletter (max of 1-3 per month). The individual needs freedom — from the initiation of physical force. The exceptional postwar boom—and make no mistake about it, it was exceptional—ended more than a quarter of a century ago, so even if we give Keynesian strategies the credit for it, we have to concede that they couldn’t sustain it. The result, of course, is a uniquely dynamic system which has produced a historically unprecedented tendency to self-sustaining growth and constant revolutionizing of the forces of production. But since neither comes close to confronting the conditions that make people dependent on the market in the first place, neither touches the underlying contradiction. Brenner makes a devastating argument against explanations of the downturn that blame it on the strength of labor and its squeeze on profits. We may conclude that there is no such obvious reason for restraining militant struggle. Individualism does not mean living a “rugged life” on a desert island or as a “lone wolf” in the wilderness, but like its antithesis, collectivism, specifies the nature of the relationship of the individual to the rest of society. The essential condition was separation from non-market access to the means of subsistence, the means of self-reproduction. Anyone interested in following the historical development of market-dependence can look at Brenner’s essays in the so-called Brenner Debate.8. Ellen Meiksins Wood‘s most recent book is The Origin of Capitalism (New York: Monthly Review Press, 1999). Only by the initiation of physical force (coercion) can one be: prevented from speaking, robbed, or murdered; that is, stopped from acting by one’s mind, rendering it useless as a means of survival. In all these ways, competition and class relations are inseparable. At first glance, Keynesian and neoliberal strategies seem diametrically opposed. I have no doubt that as an orthodox Marxist I ought to be telling you, in the language of value theory, that capitalism is constituted by both horizontal and vertical relations, both relations among capitals and relations between capital and labor, and that we can’t separate these two sets of relations, except analytically. Competition plays a central role in capitalist accumulation because capitalism is in its essence a system of market-dependence, a system in which the sphere of circulation is directly implicated in the sphere of production and in relations of exploitation as it is in no other mode of production. Human needs and wants are always subordinate to capital accumulation and subject to all the crises and contradictions associated with an anarchic competitive market. Political Economy This provides at least a historical reason for thinking that we miss something fundamentally important about market dependence, market imperatives, and capitalist competition if we fail to recognize the ways in which they’re not connected to the relation with wage labor, as well as the ways in which they are. Let me suggest that there’s a fundamental difference between saying that people in capitalist society are market-dependent and saying that they’re market-enabled. I’m sure it’s old news to socialists that there is a dual contradiction in capitalism, but I think that much of what passes for left politics these days seems to proceed on the assumption that there’s nothing fundamentally contradictory or problematic in the relation among capitals. 5. “The only proper purpose of a government is to protect man’s rights, which means: to protect him from physical violence. It’s obviously true, for instance, that capital itself is produced by alienated labor, the labor of workers who are forced to sell their labor-power for a wage. I’ll also have something to say about the question of competition and class struggle. Corporate Finance Institute. The moral concept that identifies such freedom of action in a social context is the principle of individual rights. This is the meaning behind laissez-faire — to “leave alone” and to “let one do”. For instance, it tells us something about the impossibility of so-called market socialism. In conditions where the market has this historically unprecedented role in organizing human life and social reproduction, where people must go through the market to gain access to the most basic means of self-reproduction, the provision of all goods and services is governed by certain imperatives: the imperatives of competition, accumulation, profit-maximization, and increasing labor productivity. A corporation is a business within a legal framework (based on individual rights) to limit liability where there is a separation of management and ownership. Goods and services distributed according to price mechanism (as opposed to government price controls) ... Economic freedom helps political freedom. What I’ve been talking about so far has been strategies that are based on false or misleading assumptions about capitalism, strategies based on the assumption that capitalist contradictions, if they exist at all, operate at the level of the business cycle and are basically manageable, if only we can find the right mechanisms. The end result is a declining rate of aggregate profit across the industry, with wider effects throughout the whole economy.4. If you can’t provide a supply and have no resources to be part of the demand, then you’re not needed. Brenner’s analysis of the downturn after the long postwar boom begins with a definition of capitalism. No other system of class exploitation has been mediated by the market or driven by its specific imperatives. I now want to take this point further and to say that, far from arguing against the importance of class struggle, that analysis argues strongly in favor of it.