2024-04-10
Before plunging into this one we need to understand a few definitions.
"Capitalism" can have more than one meaning depending upon context.
Let's start with the traditional meaning, which roughly speaking equates to free trade within a marketplace.
Free trade is dependent on the concept of "property", something which is "owned". I can't trade something unless I own it. I can only own it if I made it, or if I bought it, or if I was given it as a gift, or if I inherited it. (Some societies might include finding it abandoned, but subject to conditions, which is essentially a minor peripheral argument)
In England we have the ancient and honourable tradition of Market Towns, which were permitted to hold regular markets where people from the neighbourhood could come to buy and sell, or simply barter their wares. Everyone knew the routine that in that place on that day they could all come and get what they needed in exchange for what they had produced. It was an efficient use of everybody's time and effort. That tradition lives on today in the shape of weekly market stalls in a central location, selling fresh produce and all manner of other stuff. It is popular because it is interesting and we still find it convenient. And you can try your luck at haggling when the trading is coming to an end!
Even in past times however, the Monarch or his local lord controlled the times places and dates - in other words, the government performed the useful function of establishing the rules of the game, which I suppose worked as well as it might. These days the concept is extended in other forms, such as car boot sales, which are also very popular.
But the key feature of the market, whether it be in the town square or on Amazon or at car boots, is that it effects "price discovery". If Trader Joe wants 3p for his eggs but Trader Molly only wants 2p because she has twice as many to sell as Joe, then a price is discovered: 2p per egg until Molly has sold out - unless the customers only have 1p per egg to spend in which case the negotiated price will probably be somewhere between 1p and 0p depending upon how many eggs Molly and Joe don't actually need to sell today (back in the day pennies could be subdivided into halfpennies farthings and groats ... but I digress).
It''s a complex dynamic that gets sorted out over time as each trade takes place and traders work out what is selling and what is staying - and I haven't even mentioned bartering or substituting with an alternative product yet ...
Whilst it was and is still a primitive, simple, and indeed natural (if not exact) methodology, it seems that we still don't have a better one, despite many efforts to obsolete it and communists who outlawed it.
Capital comes into the mix because in general you need to invest in a means of production before you can have a product to sell. In ancient times you would need a cow to sell milk, fowls to sell eggs, woods to sell timber and charcoal, and so on. There were (and still are) specialised livestock markets to cater for these needs. The essential point is that production (even of eggs etc) requires a level of investment. You must install the pump before you can pump the water.
These days markets of all kinds proliferate everywhere because they are essential to life, and, taken overall, they work.
Then corporations, bodies corporate, were invented, groups of people who work for a common purpose as a corporation to buy its raw materials, manufacture and sell the product, pay its employees, and reward its shareholders with profits. When big enough, they could drive down their costs, increase their production, flood the market, drive out many of their competitors, buy up the now unprofitable remainder and corner the market, which then had no alternative source from which to buy the product.
This is Monopoly Capitalism, which has variations but all have an essentially predatory nature. They aim to command the supplies to market and thus the price they can charge. The more they command the supplies the higher they can fix their prices and the more profit they can make. The more profit they can make the more competitors they can buy out. Its a self-reinforcing loop, and its effect is to hold its customers to ransom - pay the price or go without. This determines the price signal according to what people can afford to pay, instead of balancing what buyers can afford to pay against what competitive sellers can afford to accept.
This can also be called "Capitalism" but in today's form it is a very long way from the original dispersed group of small competing suppliers who exchanged their goods on roughly equal terms through the competitive market trading mechanism.
At this point in the argument let's bring in the AIER to explain their view of capitalism and democracy. It's a good complementary argument, so don't skip!
"Capitalism" in our current world has become virtually indistinguishable from "Fascism" - the union of corporate oligarchy and State that becomes the de facto controlling power of a nation.
Or, in the case of the UN, potentially of the globe.
We can see that this results in an increasing wealth gap between rich and poor due to increasing prices not compensated by increasing incomes. The profits go to owners rather than to employees, taxes to government corporate cronies (for profitable "services" to the government, for which a true competitive market no longer exists in my opinion) rather than to services to the public.
There is more to it of course (notably banking, another subject all in itself) but we have now reached the stage where the oligarchs in charge of the corporations are so fabulously rich that by funding the world's news media, academia, the United Nations, and a vast and complex array of NGOs, trade associations, educational establishments, "charitable foundations" (you pay tax, we don't), "think tanks" etc (and other less savoury activities) they believe that they can bend the whole world to their fascist will.
We are about to find out whether that will happen or not.
