What do you mean by ‘Capitalism’?

(This post is a little scrappy, but because it’s meant to open a debate rather than express my full and final opinion, I think that’s okay.)

It seems to me that the term ‘capitalism’ has become so vague and slippery it’s almost like the term ‘God’, or as slippery as an eel!

There are a couple of technical economic definitions “private ownership of the means of production” – but actually, there are alternatives to what is generally understood as capitalism that have private ownership of the means of production yet aren’t recognisably or functionally capitalist, and there’s a more technical economic definition as ‘a system of giving financial and legal priority to the owners of capital over other types of economic contributions to surplus value’, which is fine, except that that isn’t the way most people use or understand the word.

There’s also a gob-splutteringly frustratingly crap implicit definition of ‘capitalism,’ which was the sense used in the Bristol Festival of Economics opening panel debate, something like “capitalism is the status quo system, the status quo system has got us this far relatively better than contemporary alternatives, therefore the capitalist system works to some extent, therefore capitalism must be good in itself and just have a few hiccups”. Ur no, go back to logic class 101, you have just committed the most gross, crass circularity! Actually this logic doesn’t even really define what capitalism is, let alone prove its point that it is basically a good thing.

In reality, over the period such people are usually talking about, there have been a great variety of different meanings of ‘capitalism’ in practice, both simultaneous diversity and changing over time: In at least some of the early Industrialist’s usage, ‘capitalism’ was a syndrome of character virtues- industriousness, frugality, enterprising innovation and conscious careful risk-taking, investing in public works, being prudent and responsible with long-term asset management. Thus to Weber there was a connection between the Protestant Ethic and the Spirit of Capitalism. Obviously, the conventional implicit definition or sense of what ‘capitalism’ is nowadays is almost diametrically opposed to what it meant to the early Industrialists. So it is stupidly unfair to claim the benefits from the early phase of Industrialisation as attributable to the current status quo version of so-called ‘capitalism.

Generally, it means so many different things to different people, I don’t think it’s a useful term anymore without qualification or specific definitions attached, but we’re hardly at the stage of a consensus understanding of even the broad categories of different interpretations and bits of ‘capitalism’ enough to have a sensible debate.

In my experience, ‘capitalism’ seems to be referred to in vitriolic superficial flame-wars in online discussions, or when the mainstream media want to quickly and efficiently stereotype, discredit and dismiss any critics of the economic status quo, as in “Anti-Capitalists today clashed with riot police…”, hence no need to report specifically what they said their protest was about.

In the typical rightwing argument, anything other than ‘capitalism’ as currently practiced must mean soviet style state socialism, and we all know how badly that went. Nevermind that it wasn’t really self-consistently ‘socialist’ in principle or in practice, and nevermind that it was the state or centrally planned aspect that made it go so horribly wrong, rather than the idea of designing some kind of economic system to serve society as a whole instead of designing it to serve entrenched private vested interests, let’s just let that argument go and move on. I accept that overall, both for better and partly for worse, capitalism as conventionally practiced has functioned relatively better in terms of people’s needs and expectations than ‘socialism’ as conventionally understood by the mainstream and as practiced in the countries which claimed to be doing it. So let’s accept that the vague mixture called ‘capitalism’ has at least some good bits, and now let’s try to be more specific what are the problems or ‘areas of room for improvement’!

I propose splitting up The Beast, the great mythical mysterious It, into its constituent ideas or structural principles, so we can get people debating the bits rather than the overly big and muddled uber-term ‘Capitalism’, e.g.:

Private ownership of the means of production – not necessarily a problem in itself, unless it’s excessively concentrated and polarized (possibility of building in mechanisms so the next system intrinsically tends to allocate resources in accordance with http://en.wikipedia.org/wiki/Subsidiarity?)

Free market – ‘freedom’ in what sense? freedom to work for a personal and family livelihood (and optionally, for the common good as well) within a fundamental moral framework, or freedom to exploit and oppress others as far as the rules will stretch? Freedom as a right to free-ride on society without contributing a fair share in taxes? Free as in merely free of state interference, or free as in reasonably approximately equal negotiating power in economic interactions, with reasonable alternatives available if the deal is not sufficiently win-win for all sides?

Entrepreneurialism – high cultural value and economic incentives attributed to entrepreneurial innovation and creativity – probably at least partially a good thing?

Capital owners being considered to have first right over surplus value, regardless of the real proportion of value they have contributed to making that surplus – let’s call this the priority of capital for short. (Versus: Labour theory of surplus value, or synthesis of the reasonable parts of both concerns in Mutualism.)

The doctrine of shareholder value (or ‘shareholder value fundamentalism’) – implies an alienation of moral responsibility from the person to the corporation, from the corporation to the State, and from the State to the electorate, but electorate has too dispersed control for it to feel worthwhile for individuals to invest the energy in investigating and making careful, socially responsible decisions, so result is a complete circle of alienation of responsibility.

*Short-term* monetary profit is higher priority than long-term optimum overall outcome

The false) sense of equivalence of *monetary* economy with ‘the economy’, and thus unrealistic allocation of resources.

Lending with interest – original function was early industrialisation required sufficient concentration of capital to enable industrial development and hence improvements on average in standards of living and life expectancy. However, interest as a mechanism for concentrating capital has no integral ‘enough’ mechanism. Also, the concentration of capital resources by private ownership is inconsistent with democracy, because it tends towards regulatory capture and exploitative control of access to capital.

Interest also tends to incentivise short-term over long-term benefits (versus: demurrage)

Falsely reified dichotomy between private and public economic spheres.

Intellectual property rights – in principle, intellectual property rights (despite the name) are contrary to one of the founding principles of capitalism – free flow of information

When what a society’s economy is ‘producing’ is mostly information (and technology), if you maintain strict ‘intellectual property rights’ then that is in practice seriously compromising the free flow of information and development.

I am not proposing each and every structural element here as potential complete definitions rather than constituent parts. Some of them necessarily imply some others, but not all, e.g.

Lending with interest – if it’s the only form of credit in a system it’s problematic, because it necessarily implies short-termism in investment and development decisions, because of the discount rate. However, that is not necessary, conventional fiat money bearing interest could also exist counter-balanced by mutual credit money, possibly with demurrage to add a positive incentive for long-term investment, and-or co-operative joint venture finance (or ‘Musharakah’) as an alternative to lending with interest, in a complimentary sort of competition.

Private ownership if applied absolutely and without limits does conflict with mutualism (as an alternative to the priority of capital), but if it’s interpreted and designed in a form in accordance with subsidiarity, it doesn’t have to.

Free markets do not necessarily require the doctrine of shareholder value and alienation of moral responsibility, but that depends on the interpretation of ‘freedom’

Another issue with post-industrial capitalism is the rise of absentee shareholder owners who take no responsibility at AGMs and Directors with limited liability -no-one ends up taking any responsibility for anything other than the bottom line *that year*! i.e. the problems with limited liability PLCs

The assumption that of necessity prosperity requires poverty somewhere else, because it’s a zero-sum game – the ‘struggle for survival’ pseudo-evolutionary rhetoric.

I don’t think this is necessarily the case for any stage or form of capitalism overall, but especially in a post-industrial capitalism, zero-sum economics does not apply

The way economic activities become more than zero-sum or win/lose is by collaboration and co-operation -which conflicts with the current practice of so-called intellectual ‘property rights’.

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Four political hypotheses and four predictions to test them (my core political strategy beliefs)

These are assumptions because I do not have the resources to be able to test or prove them, but they’re working assumptions or hypotheses that I’m willing to find myself mistaken about. As political hypotheses, I have tried to formulate some predictions with which to test them, however, I expect the timeframe of testing to take up most or all of my life!

1) That almost all the man-made evils in the world are mainly the result of ignorance and incompetence, not so much malice or conspiracy. I do acknowledge that there probably are cases of malice and conspiracy involved too, but I don’t think they’re coherent or systematic enough to be more than a minor part of why the world’s so messed up. Mostly the problems in the world are the accumulated consequences of collective stupidity, not so much conscious or deliberate evil choices. Greed certainly plays a part too, but I don’t think even greed contributes as much to the man-made evils in the world as sheer stupidity.

It often seems incredible on first impressions with the scale and severity of dreadful results ‘authorities’ and people in positions of control and responsibility (who claim such exorbitant wages for their ‘experience,’ i.e. age, and ‘expertise’, i.e. in most cases, delusions of grandiosity) have managed to create that they could possibly be merely incompetent and not actually malicious, but from my experience so far I believe it to be true. The proverb “never underestimate the stupidity of the great British public” unfortunately applies just as well to the vast majority of politicians and business leaders!

For example, on banking or monetary reform, Steve Baker (Conservative MP for Wycombe), says that only a small handful of MPs have any real understanding of monetary theory, how the current monetary system actually works, or are really able to understand, let alone properly decide upon, alternative proposals for how to make it work better. There are around 650 MPs. Currently, most MPs are Conservative, so draw your own conclusion about what he’s also implying about his own party! He makes the point too that it’s ignorance and incompetence, not malice or conspiracy.

2) That the current socio-economic system is already collapsing by itself and fighting against it is a waste of energy, distracting and can be counter-productive (mainly because it elicits a reaction to the fight itself and the tribalistic instincts aroused rather than the actual shared problems). What is needed at this point is public awareness and pressure behind already well worked-out, practical alternative proposals, and preferably not just conceptual-stage proposals, but ideas that have already been tested and proved in practice on a small scale at least (e.g. mutual credit complimentary currency systems, see Bernard Lietaer, http://www.lietaer.com/category/case-studies/). As Avaaz founder, Ricken Patel, says, it’s about pragmatic idealism, or idealistic pragmatism. The best way to convince un-convinced people that your idea is valuable is to show it working in practice, and show it producing what they want too. As Charlie Chaplin and Howard Zinn (hard to tell now who said it first and who was quoting whom) both said, it’s about “forming the structure of the new society within the shell of the old”.

If my assumption no.1 is correct, I predict that the majority of politicians and business leaders who are not malicious but just a bit clueless will tend to jump on the bandwagon of popular campaigns for practical positive alternatives, as soon as: a) it becomes an ongoing part of the agenda of the lowest common denominator of the tabloid media, i.e in the UK, that means The Daily Mail, -not that the Mail has to approve, but the campaign needs to aim first to breakthrough into the Daily Mail’s agenda to achieve mainstream, ‘middle-englander’ level of awareness, if it’s to progress to the next stage; b) the politicians and business leaders (accept and work with the fact for now that you’re mostly dealing with middle-aged, middle-class white males) need to be convinced it can actually work practically -if you can get even slightly sympathetic coverage in the Daily Heil, you no longer need to be concerned about lower levels of political feasibility! This is the point at which you absolutely must have a highly articulate lobbying team who come across as literate bordering on academic, yet with enough pragmatic political nowse to pace themselves and be persistent, and to focus on explaining and assuming bona fides and good will, not assuming that you’re facing ‘the enemy’. Treat your opponents as reasonable human beings until persistently proven otherwise.

There are other ethical reasons to prefer pragmatic idealism over absolutist idealism: a) If you actually really care about the feelings of the people most affected by the accumulations of stupidity, greed and cruel indifference in global politics and economics, then it follows to do whatever you can to even relatively, incrementally, relieve their suffering. ‘Sticking to your principles’ in an absolutist tribalist fashion is, like Turgenev’s Mumu compared to Marx’s Das Capital, not really so much caring about people and actual people’s suffering or happiness as arguing about ‘the People’ in order to seemingly justify one’s own position. b) In regard to one’s opponents, absolutist idealism tends to encircle one’s critical faculties in a tribalist kind of stereotyping, which leads one to ignore the reasonable section of the opposing faction and actually spend most of one’s time and energy in futile bickering especially with the most unreasonable section of the opposing party. c) Considering the evolutionary and developmental origins of morality, if our ancestors and our parents had not been willing in the past, as and when necessary, to ridicule, to gossip about, to ostracise, to punish, even occasionally to kill those who violated the basic moral norms of society and threatened to undermine the egalitarian and communitarian cultural foundations of natural human social structures, then our instincts for peace, our instincts for non-violence and our instincts for community and egalitarianism would never have had the social environment to be selected for or have evolved in our species or have developed in our individual lifetimes in the first place. There are fair and just times and situations when ostracism or punishment, even killing as a last resort, are unfortunately the right thing to do. ‘Bad’ and ‘wrong’ are importantly different. Absolutist, tribalistic idealism is not more moral or compassionate than pragmatic idealism. It is more often like a fashion statement, or a self-justifying form of quasi-adolescent identity anxiety. It is a way of identifying with a group against another group that has nothing integrally to do with universal moral principles or actual feelings of empathy or solidarity. ‘All’ in moral claims is often practically equivalent to nothing. I would rather try to care for one particular individual immediately in front of me genuinely and consistently, and learn through practice and feedback and challenges and pain and real life to love them a little more perfectly every day, than to claim pretentiously to love ‘All Beings’ or ‘the People’ and actually spiral downwards into callous cruel indifference and Pharisaic pompous claims of absolute or unconditional love.

There are a few campaigns currently that fit my criteria above for a fair test of my political hypothesis that politicians are mostly incompetent but not malicious, e.g.: Positive Money -still a little bit baffling technically (to me), but otherwise ticks all the boxes, especially strong on highly articulate lobbying, not so hot at first (but getting brilliant this year) on popularist media presentation, but not bad on that either. I predict they’ll get more or less what they want, eventually. I further predict that what will tip the balance (at least about monetary/ banking reform) is if massively more people drop the sense of malevolent conspiracy and get practical, and start asking their MPs the sort of questions that initially make them take platitudinous evasive manoeuvres but then send them desperately onto wikipedia till 2am in the morning to find out what on earth the question actually meant in case they ever get asked something like it again! If one dose of being shown up not knowing what they’re talking about doesn’t do it, keep asking them educated questions until they phone up one of the (very few) MPs in their party who does understand some monetary theory (or whatever the issue is) for help.

3) Following from my assumption that the current socio-economic system is already collapsing by itself, I believe that even IF there are some real conspiracies out there, even if 9/11 was an inside job (I’m a 9/11 agnostic, incidentally), SO WHAT?!?

I don’t doubt that there is some real evil in the world or that there are some actual conspiracies by corporate bosses and corrupt politicians against the common good, but it matters very little when the whole system they work in and depend upon is collapsing and returning dust to dust, ashes to ashes.

I really don’t care whether any particular conspiracy theory is true or not, because I think it’s a dangerous irrelevancy to give such a dis-empowering, impractical form of zeitgeist attention. The conspiracy worldview contains the implicit assumptions that the mythical ‘they’ are all-powerful, all-malevolent and all-knowing (they have eyes everywhere, they’re online!), it’s a weird sort of archetypal projection of what previous generations would probably have called ‘the devil’ or devils. I don’t deny there is some real deliberate conscious evil going on out there, but essentially I believe that love is stronger than hate overall in humans, on average, and truth conquers all, eventually, mostly.

Also, more explicitly strategically and sounding less like a moral argument (although I don’t really think the two are separate), whether or not some of the evils in the world are the result of malevolent conspiracies, how does it change what we have to do next? If the Federal Reserve is really a front for the Bilderbergs or The 1% or Jewish Lizard Slithereens, what difference does it make to what needs doing differently? It almost certainly makes no practical difference whatsoever. We still need to understand better the details of how current monetary and banking systems actually work, we still need to grow public awareness and build political momentum and comprehension, we still need to work out all the technicalities of implementing practically better systems in the future, and then if we succeed, whether the evils of the past were mainly due to a malicious conspiracy or mainly due to accumulated consequences of collective ignorance and stupidity, it will make no difference, if we start doing what actually needs doing now!

The kind of reasoning in superstitious conspiracy  theorising is similar to the immutability argument over the supposed existence of a supernatural: if there was a supernatural, eternal, unchanging, self-identical absolute entity, existing discretely in and of itself, how could it have any causal interaction with anything in the empirical, causal world, without changing it’s self-nature to become a causal factor? Or if you posit a secondary attribute that makes it sometimes a causing-cause and sometimes a non-causing ultimate cause, then how does the secondary attribute have any causal connection to the absolute immutable object, and how do you avoid logical infinite regress? (see: Bhikkhu Bodhi, The All Embracing Net of Views, translation of the commentary to the Brahmajala Sutta, section on ‘refutation of the Eternalist view’, and D. J. Kalupahana, Mūlamadhyamakakārikā of Nāgārjuna, translation and commentary)? That whole kind of reification and speculation about the existence of incredibly abstract supposed entities is not just probably false but also utterly practically irrelevant whether it is true or not.

4) Reifying and demonising is a probably always a counter-productive moral strategy, because it leaves X with no ethical scrutiny of the actual details of their behaviour, no incentives or rewards for being good or becoming gradually better, and nothing further to lose in terms of reputation.

E.g. Genetically Modified Organisms or the Biotechnology industry. I suggest that: a) genetic modification is just a technique, and like a tool, or like a hammer, it is morally neutral in itself, but what matters is what it’s used for and how, in detail, on a case by case basis.

Often when we generalise, demonise and then treat a whole industry (such as biotechnology, banking, or politics) as necessarily, intrinsically bad, when really the badness isn’t a necessary part, actually the effect is to let them off the hook of even having to try to appear good, let alone really improve. The reason is that there are no incentives or rewards for being good, and nothing further to lose in terms of reputation, if we treat people as absolute pariahs, beyond the pale of humanity, incurable sinners. It might even be true in some individual cases, but on a social level it’s not good strategy.

Reputation is a network effect, but if a person or organisation or corporation is already excluded from networks of people who care ethically, then they actually have no (relevant) reputation left to lose. Participation, even circumscribed and limited to commensality but not full moral communion in a social or market network that will give them early feedback away from bad choices and towards better choices* may have a better outcome for all than too hasty or too harsh application of complete shunning. If or when an economic boycott seems right, at least give them the benefit of the doubt about their motives enough to explain to them why. (Yes, that’s a reference to my sister in law’s preferred telling-off phrase to my toddler nephew “____, are you making good choices now?” As a description of my moral-political beliefs, it would be fair to observe that I feel being a bit patronising is less problematic than using the stereotype-discredit-dismiss tactic, which is almost always unfair and useless.)

In some instances compliance with campaigns for more ethical and sustainable business practices may even begin as greenwashing, but even that is implicitly acknowledging the agenda, if not acting on it adequately. They have conceded ground if they admit there’s a problem by even just pretending to do something about it! At that point, you probably know they do care a bit what people think of them and are not willing to openly profess evil intent. An example of openly professing evil intent was Levi’s response to Labour Behind the Label’s request for information about whether they were making any steps towards paying a living wage to garment workers in their suppliers’ factories, which was to deny the principle that they should even aim to eventually pay a living wage and say that they only have to comply with the laws of the country they’re operating in and have no moral responsibilities as a private business, in principle).

Strategically, then campaigning for a better practical way of responding to your ethical and sustainability concerns, such as through Carrot Mob, is probably more likely to be effective than further shaming them. They already feel ashamed enough to be motivated to try to pretend to be improving; too much shaming or shunning is liable to tip them into hopelessness and feeling like they’ve nothing to gain from actually trying to seriously sort their act out.

When I first wrote this post, I didn’t include a link to Carrot Mob because they weren’t yet active in the UK, but they are now – hooray! – so here’s a link: https://carrotmob.org/ The idea of carrotmobbing is that the carrot is almost always stronger than the stick. As anyone who’s ever tried to maintain regular attendance at a gym would recognise, if you can devise ways of motivating yourself to go through temptation (ooh, pretty people! or, ‘yum fruit salad!’, if that works better for you! ) rather than threats or punishment, it’s almost always more effective overall.

Hello world!

As I’m collecting some of the better things I’ve written before, posts will be appearing not in the original chronological order I wrote them in but something more like in the order of importance I feel about them now.

I suggest you make maximum use of the tagged categories to find posts you’re interested in. I shall try to make maximum use of tagging by subject and topics to make my posts easy to find.

For people who are new to wordpress like me and don’t quite know how to navigate it yet, here’s my ‘about me’ page, in case you want it- http://en.gravatar.com/ravinggreen