The history of 'Capitalism' as an economic idea

Usually things exist for a while before they are theorized, and the same indeed holds true for capitalsm. I agree that usually not everybody is aware of "the long-term forces" (to clarify them is why historians exist infact), but my understanding of history is that states are born of very practical and immediate reasons.

Consider how dangerous ancient Greece or Mesopotamia were. There, states were presumably created by people banding together out of a simple need to defend themselves and their crops from human predators. Yet, they weren't "capitalist" by any stretch of the imagination.

Likewise, economies can take different shapes and forms that aren't capital-centered. Consider how "economy" existed in places where there was no money. This is difficult for most people to visualize today because it's not at all what they are accostumed to.

Voltaires Hat said:

After a broad reading of history my current understanding is that the phenomena of Capitalism predated the phenomena actually being labelled with the term 'Capitalism'. IOW, currents of history and economic activity were given a post-hoc definition and contextualized a certain way - as Capitalism - and not necessarily put in a broader context of long-term forces and social organization across time (centuries and millennia)

In other words, economists and historians have framed an element of our economies in a certain context (the use of capital), and this has set the framework for economic discourse over the past few centuries.

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Murray Rothbard wrote a 2 volume history An Austrian Perspective on the History of Economic Thought where he looked for concepts before they were categorized in what we call economics.

He focuses on what is called the Austrian School but it is valuable for your post. Rothbard goes back to the Greeks for conceptual ideas – he does briefly discuss Taoism in ancient China but he wrote “Though remarkable for its insights, ancient Chinese thought had virtually no impact outside the isolated Chinese Empire in later centuries, and so will be dealt with only briefly.”

Rothbard’s first chapter covers: Natural Law; The politics of the polis; The first 'economist': Hesiod and the problem of scarcity; The pre-Socratics; Plato's right-wing collectivist utopia; Xenophon on household management; Aristotle: private property and money; Aristotle: exchange and value; and The collapse after Aristotle

From there in Volume 1 he covers the Middle Ages, the Renaissance, the Spanish scholastics, political absolutism in Italy and France, Mercantilism and the reaction against it, Richard Cantillon, the Physiocrats, Turgot, the Scottish Enlightenment, and Adam Smith.

Economics as a modern theoretical undertaking only started with Richard Cantillon, whose Essai was read and supported by Hume and was one of the few books actually cited by Adam Smith. Marx popularized the word capitalist but Turgot used it before him. But economic insights go way back.

Thucydides viewed the political behavior of individuals and the subsequent outcomes of relations between states as ultimately mediated by, and constructed upon, the emotions of fear and self-interest.

In reference to the cause of the Peloponnesian War was he stated: "The growth of the power of Athens, and the alarm which this inspired in Lacedaemon, made war inevitable." Of course it was Athens’ mercantile power that threatened Sparta, not its military prowess.

Polybius writing in the generation before Caesar’s birth clearly had a view of economic class analysis:

“…as soon as…the democracy has descended to their children’s children, long association weakens their value for equality and freedom, and some seek to become more powerful than the ordinary citizens; and the most liable to this temptation are the rich. So when they begin to be fond of office, and find themselves unable to obtain it by their own unassisted efforts and their own merits, they ruin their estates, while enticing and corrupting the common people in every possible way. By which means when, in their senseless mania for reputation, they have made the populace ready and greedy to receive bribes, the virtue of democracy is destroyed, and it is transformed into a government of violence and the strong hand. For the mob, habituated to feed at the expense of others, and to have its hopes of a livelihood in the property of its neighbors, as soon as it has got a leader sufficiently ambitious and daring, being excluded by poverty from the sweets of civil honors, produces a reign of mere violence. Then come tumultuous assemblies, massacres, banishments, redivisions of land; until, after losing all trace of civilization, it has once more found a master and a despot.”

The Roman historian Livy one of the Roman Secessio plebis (basically a general strike) which was an effective strategy in the Conflict of the Orders because of the strength in numbers; plebeian citizens made up the vast majority of Rome's populace and produced most of its food and resources.

Giambattista Vico, although little focused on material matters, described his ideal eternal history most colorfully when he gave us this axiom: “Men first felt necessity, then look for utility, next attend to comfort, still later amuse themselves with pleasure, thence grow dissolute in luxury, and finally go mad and waste their substance.” These are certainly economic notions.

The Scottish Enlightenment with Henry Home (Lord James Kames 1696 –1782) offered the first full-blown theory of human progress with four distinct stages of growth, based on how human beings make their living (what later Marx would call “the means of production”)

1. Hunting and fishing

2. Animal Domestication

3. Agrarian Stage

4. Commercial Stage

Turgot, similar to Lord Kames, also developed the four-stage theory of economic and social development from hunter-gatherer, to pastoral, to agricultural, and finally to the peace and prosperity of commercial or market society.

Both Lord Kames and Turgot employed an evolutionary theory of development in which society naturally progresses, evolving in a sequence of regular stages, the last of which is the contemporary commercial world of capitalism. Their idea was of a linear progressive advancement of mankind although their experiences of his own era made clear that, contrary to Marx later, there was nothing deterministic about the process.

Voltaires Hat said:

What I wonder, however, is if there are broader, more fundamental forces at play in the organization of our economies. Or, in other words, other ways of contextualizing our economies that aren't appearing in current economic debate?

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I think the idea of social classes fits into the picture, but not in the way Marx thought.

Of course, Marx did not originate class analysis as he admitted in a March 5th, 1852 letter to his follower, Joseph Weydemeyer, the first exponent of Marxism in the United States:

“...And now as to myself, no credit is due to me for discovering the existence of classes in modern society or the struggle between them. Long before me bourgeois historians had described the historical development of this class struggle and bourgeois economists, the economic economy of the classes. What I did that was new was to prove: (1) that the existence of classes is only bound up with particular historical phases in the development of production (2) that the class struggle necessarily leads to the dictatorship of the proletariat, (3) that this dictatorship itself only constitutes the transition to the abolition of all classes and to a classless society.”

Leaving aside Polybius, formal class analysis, as Marx recognized, had been around since at least the early 19th century in the writings of French libertarian historians Charles Comte and Charles Dunoyer. It was explicit in the political thought of Americans John Taylor of Caroline and John C. Calhoun and Englishmen John Trenchard, and Thomas Gordon (authors of Cato's Letters, that were so influential in the American colonies prior to the Revolution) – all of whom predated Marx. William Leggett in America for example, wrote of New York City in the early 19th century, "Not a road can be opened, not a bridge can be built, not a canal can be dug, but a charter of exclusive privileges must be granted for the purpose.…The bargaining and trucking away [of] chartered privileges is the whole business of our lawmakers."

The Frenchman Adolphe Blanqui (1798-1854), a protégé of J. B. Say wrote of economic nature of classes, but his analysis pointed to a parasite-host kind of relationship and implicitly denied Marx’s claim that the “existence of classes is only bound up with particular historical phases in the development of production.”

Blanqui:

“In all the revolutions, there have always been but two parties opposing each other; that of the people who wish to live by their own labor, and that of those who would live by the labor of others….Patricians and plebeians, slaves and freemen, guelphs and ghibellines, red roses and white roses, cavaliers and roundheads, liberals and serviles, are only varieties of the same species…

….So, in one country, it is through taxes that the fruit of the laborer's toil is wrested from him, under pretense of the good of the state; in another, it is by privileges, declaring labor a royal concession, and making one pay dearly for the right to devote himself to it. The same abuse is reproduced under more indirect, but no less oppressive, forms, when, by means of custom-duties, the state shares with the privileged industries the benefits of the taxes imposed on all those who are not privileged.”

Voltaires Hat said:

To me it appears like politics manifests itself in a tension between vying for the collective vs vying for the individual, while few members of any given society actually understand long-term forces, or why their institutions function the way they do. i.e. what is the purpose of a State? Why does it exist? How do we make it sustainable?

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Collectivism is certainly a big part of it in my view. The year World War I broke out, Franz Oppenheimer presented a more explicit analysis of the state and class in his The State Its History and Development Viewed Sociologically:

“There are two fundamentally opposed means whereby man, requiring sustenance, is impelled to obtain the necessary means for satisfying his desires. These are work and robbery, one’s own labor and the forcible appropriation of the labor of others…

I propose in the following discussion to call one’s own labor and the equivalent exchange of one’s own labor for the labor of others, the “economic means” for the satisfaction of needs, while the unrequited appropriation of the labor of others will be called the “political means…

The state is an organization of the political means. No state, therefore, can come into being until the economic means has created a definite number of objects for the satisfaction of needs, which objects may be taken away or appropriated by warlike robbery. For that reason, primitive huntsmen are without a state; and even the more highly developed huntsmen become parts of a state structure only when they find in their neighborhood an evolved economic organization which they can subjugate.”

Basically, Oppenheimer was saying there are two ways to acquire goods that are valued – work, the “economic means” and robbery, the “political means.”

Obviously, that is stark. But physical coercion is also stark and it is the defining characteristic of the political state.

Voltaires Hat said:

There is a lot to comment on, but the above part of this post stood out to me. One of my interests is in how the Capitalism / Socialism dichotomy seems to have become embedded in political and economic debate, as opposed to a theoretical striving for real sustainability for everyone. However, when you start thinking about political means our current state of affairs makes a little more sense.

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For me the difficulty in the Capitalism / Socialism dichotomy stems from a lack of conceptual clarity in the words “Capitalism” and “Socialism.”

Capitalism has been recently defined this way:

“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”

Definition of CAPITALISM

The same source defines Socialism this way:

“any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods”

Definition of SOCIALISM

There have been many threads in this forum that have debated these definitions with well-informed posters dissenting from them – sometimes radically. So, I am not claiming that these definitions are sacrosanct, but using them as a basis of discussion it is clear that since the back half of the 19th century in Europe and America there has been a steady increase in active political intervention in huge swaths of economic activity – banking, aerospace, communication, transportation, energy, education, land use, hiring practices, etc. Therefore, using these particular definitions, there has been a steady drift in a so-called “Socialist” direction that has by this point resulted in substantial changes in economic structure and policies from the period when the terms were initially conceptualized.

Using the definitions above, or any other set, I think we have a clear difficulty because of a lack of intersubjective coherence within the populations about what these terms actually mean. I used the following in a recent thread but I think it applies here as well.

Here is Plank #5 of Marx’s 1848 Communist Manifesto:

“Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.”

So, are the Western banking systems capitalist or communist? We can’t say without unified definitions of the two concepts within the minds of the populations.

Regarding the U.S., in 1989, Milton Friedman, a Nobel Prize winning allegedly “Capitalist” economist offered a generalized definition of “Socialism” and commented on it:

What is socialism? In its purest form, socialism is government ownership and control of the means of production. Ownership of anything implies the right to the income produced by that thing.

All means of production in the United States - people, land, machines, buildings, etc. - produce our national income. Spending by government currently amounts to about 45 percent of national income. By that test, government owns 45 percent of the means of production that produce the national income. The U.S. is now 45 percent socialist.

Ownership of anything also implies control of how it is used. An owner may delegate detailed control to agents, as most private stockholders of private corporations do, while retaining the right to replace the agents. Government is in that position with respect to many of the means of production that produce the income it receives.

That was after two terms of “Capitalist” Ronald Reagan and the “pro-Capitalist” forces have heavily contributed to the increase in intervention.

Even more, it was Friedman that suggested that government should withhold income taxes from workers’ paychecks before they ever saw the money and make them apply to the government to get it back – obviously a powerful broadside leveled at the concept of a free economy; it was Friedman who advised President Nixon to completely abandon market-based commodity money for a state-managed fiat currency; and it was Friedman’s Negative Income Tax in 1980 that today is called Universal Basic Income were people are assured an income at the expense of others. Even his School Voucher idea that was adopted was/is a form of welfare because a family can receive more in benefits than it contributed in taxes.

The merits or demerits of any of these things I just mentioned are probably not relevant to the higher level discussion your post addressed, but the long-term trend toward economic intervention indicates how meanings have changed over time – with the result that it is just really difficult to have a rational discussion about “Capitalism” and “Socialism” without first being almost compulsive about definitions and historical context.


When you say as opposed to a theoretical striving for real sustainability for everyone I believe that both groups, Socialists and Capitalists, would argue that their approach, if allowed implementation would yield a sustainable system. “Socialists” would contend that with the their prescriptions current excesses and mal-distributions would be purged or at least effectively mitigated, while “Capitalists” would argue that their system would lead to the kind of growth rates that there had been in the past – with a growing subset of “Capitalists” holding that the current and growing mal-distributions of wealth are also a product of political intervention.

Voltaires Hat said:

When the framework is the Global state system it makes sense for different political groups in a state to strive for different economic approaches.

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People are certainly striving for different economic approaches. But I think that results from fundamental disagreements about what a sustainable economic system would look like. I think it is part of the intersubjective incoherence within the population.

Voltaires Hat said:

For some, collectivization is advantageous because they don't have enough, while for others individualism is advantageous because they are able to provide for themselves. So in this light the modern liberal/conservative divide is likely indicative of stable political philosophies across time. People hold and perpetuate these philosophies because it is in their interest to do so. Actual truth and long-term objective goals don't, or rarely, play a part. A community is by default a set of groups with different interests.

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I think there is an implicit assumption in your comment that collectivization is useful because it allows the have-nots to make gains. I do not agree with that assumption but there is no doubt that it is widely held – especially among those who believe in the utility of political intervention to effectively “reform” the system, while folks like me contend that political intervention has, and will continue, to benefit the ruling class because they largely control the nature of those interventions.

Voltaires Hat said:

So in this light the modern liberal/conservative divide is likely indicative of stable political philosophies across time.

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I don’t see much of anything that is stable about modern political philosophies since representative system in Italy and Germany collapsed into authoritarian regimes after World War I, although I do see some stability in personnel that make up the top and bottom groups. It is my opinion that the hollowing out of the middle class is driving the populist radicalization of that middle class in Europe and especially the U.S. – starting with the lower, less educated element of that middle class because they feel the most insecure.

Voltaires Hat said:

People hold and perpetuate these philosophies because it is in their interest to do so. Actual truth and long-term objective goals don't, or rarely, play a part. A community is by default a set of groups with different interests.

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I fully agree.

I have often argued - tongue in cheek - that the Norman invasion of England was an early example of a successful joint-stock company in which the surviving shareholders are still drawing their dividends. But then you could apply the same standard to any warband that takes over a neighbouring territory.

There is not one single form of Capitalism; its nature and organisation varies all the time. Therefore in the economic sense it is necessary to quality what form of capitalism applies: managerial, shareholder, state, social and disaster are all qualifying descriptions that immediately spring to mind and there are others. It is noted that this short debate has already highlighted the difference between the haves and the have-nots.

The argument over collective activity is a distraction. Capitalism is a collective activity: the issue is about the division of the outcomes. This is the same issue with all societies since time immemorial. The ownership of the means of production determines who gets the biggest share. This applies as much to feudalism, mercantilism, monarchy, slave societies and so on as it does to capitalism.

Why is it that different societies use various cultural mechanisms to define who gets the biggest share? What is wrong with equality? Where does it say in science and religion that there are two species of human; one who gets the prizes and the other who gets the penalties? There are political and economic theories that try to justify the act of expropriation, but how valid are they?

Capitalism is all about the ownership of capital and its deployment in the creation of value. The hierarchy it requires need not be rigid or vast, its management can be flat, and the reward for its workers can be generous. It need not be about monopoly, oligopoly or social control.

The principle observation has to be why can't capitalism have a more mutual arrangement between labour and capital? They both need each other. Labour has little capital and capital has little labour. The combination of the two has to be what capitalism is all about. There is a mutual interest and need. This need not be determined by any state agency.

Capitalism and, Socialism are just a pair of abstract concepts that offer a socio-economic evaluation of modern political activities as they relate to money.

They're not "backwards compatible" with prior human experience. That's why people talk more about things like "mercantilism" or, "feudalism" or use terms like "Thassalocracy" to define ancient Athenian foreign relations.

People latch onto Socialist and Capitalist theory not because they're particularly "useful" or accurate when describing history but because they're more "active" historical and political theories. In other words, they both offer - ironically, the same thing - people studying history something to "DO" with the knowledge they acquire because both systems have the same basic goal of:

"Understanding the past in order to manipulate future outcomes."

Generally, the farther backwards you move in time from the 19th century, the less useful Socialist and Capitalist interpretation becomes because: the greater the impact of the environment as a deterministic factor on human activity becomes. Conversely, the farther forward you move in time from the 19th century, the less useful these interpretations become because: the impact of the environment as a deterministic factor on human activity becomes less significant.

Both socialism and capitalism were conceived at a weird time where the environment could be largely ignored, but couldn't really be changed by human activity.

stanilic said:

The principle observation has to be why can't capitalism have a more mutual arrangement between labour and capital? They both need each other. Labour has little capital and capital has little labour. The combination of the two has to be what capitalism is all about. There is a mutual interest and need. This need not be determined by any state agency.

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There's a simple reason why a more mutual arrangement can't exist. Labor can substitute for capital when capital doesn't exist. Labor has REAL value, it can feed, shelter and clothe people. Capital however, can't substitute for labor when labor doesn't exist. Even if automation is pursued, there still has to be an initial investment of labor to "capitalize on the capital." Capital has ARTIFICIAL value.

So, in order to maintain the system, capital has to seek, gain and, hold power over labor.

Without commenting on the "ethics" or "morality" that's my observation of the strict REALITY of the labor/capital relationship as it applies - equally - to both Capitalist and, Socialist systems.

GIJoe said:

There's a simple reason why a more mutual arrangement can't exist. Labor can substitute for capital when capital doesn't exist. Labor has REAL value, it can feed, shelter and clothe people. Capital however, can't substitute for labor when labor doesn't exist. Even if automation is pursued, there still has to be an initial investment of labor to "capitalize on the capital." Capital has ARTIFICIAL value.

So, in order to maintain the system, capital has to seek, gain and, hold power over labor.

Without commenting on the "ethics" or "morality" that's my observation of the strict REALITY of the labor/capital relationship as it applies - equally - to both Capitalist and, Socialist systems.

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I agree that labour can stand on its own feet while capital requires some sort of support. However, are people only happy with their labour when they could be doing other things? There was no capital in the neolithic period but a great deal of labour - or is that a poor observation?

stanilic said:

I agree that labour can stand on its own feet while capital requires some sort of support. However, are people only happy with their labour when they could be doing other things? There was no capital in the neolithic period but a great deal of labour - or is that a poor observation?

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That's a poor observation. Capital includes man-made tools that make labor more productive/efficient (in some cases making labor actually possible). Land, labor, and capital necessitate each other.

Also, it can be seen as a mistake to assume that socialism is the categorical opposite of capitalism. It can be argued that socialism is just a restrictive form of capitalism that has yet to come to the understanding economic freedom leads to prosperity. They are former radicals who employ conservative means to try and achieve liberal goals.

BrutusofNY said:

Polybius writing in the generation before Caesar’s birth clearly had a view of economic class analysis:

“…as soon as…the democracy has descended to their children’s children, long association weakens their value for equality and freedom, and some seek to become more powerful than the ordinary citizens; and the most liable to this temptation are the rich. So when they begin to be fond of office, and find themselves unable to obtain it by their own unassisted efforts and their own merits, they ruin their estates, while enticing and corrupting the common people in every possible way. By which means when, in their senseless mania for reputation, they have made the populace ready and greedy to receive bribes, the virtue of democracy is destroyed, and it is transformed into a government of violence and the strong hand. For the mob, habituated to feed at the expense of others, and to have its hopes of a livelihood in the property of its neighbors, as soon as it has got a leader sufficiently ambitious and daring, being excluded by poverty from the sweets of civil honors, produces a reign of mere violence. Then come tumultuous assemblies, massacres, banishments, redivisions of land; until, after losing all trace of civilization, it has once more found a master and a despot.”

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The part I have bolded today seems to reflect a certain level of wealth in society who instead of realising they have succeeded in life are instead competing with each other in who can outdo the other in terms of displaying wealth. They also seem impervious to economic cycles. This is recently come into the public recognition as the 1% vs the 99%.

I have read at a time much earlier in US society that companies had a moral outlook in that the CEOs should not earn more than x 20 the lowest paid worker.

That seems like a good idea to me though shareholders in those same companies might not agree.

GIJoe said:

There's a simple reason why a more mutual arrangement can't exist. Labor can substitute for capital when capital doesn't exist. Labor has REAL value, it can feed, shelter and clothe people. Capital however, can't substitute for labor when labor doesn't exist. Even if automation is pursued, there still has to be an initial investment of labor to "capitalize on the capital." Capital has ARTIFICIAL value.

So, in order to maintain the system, capital has to seek, gain and, hold power over labor.

Without commenting on the "ethics" or "morality" that's my observation of the strict REALITY of the labor/capital relationship as it applies - equally - to both Capitalist and, Socialist systems.

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But in a specialized economic system most labour is also ”artificial” in value. This argument is not convincing I think.

The only kind of labour the value of which is not ”artifical” in the sense you describe is one where you own your own time, your own means of production is beholden to no one and dependent to no one for your survival. The closest thing like that I can think of is an armed yeoman farmer with some craft-skills, living with his family on a plot of land surrounded by others like him.

EDIT: If you admit a certain degree of specialization and security of institutions etc as a given, then your argument is also rather reversed. Most labour is replace:able, because the labourers have skills that are comparatively common. You can’t get around scarcity.

Divinespark said:

That's a poor observation. Capital includes man-made tools that make labor more productive/efficient (in some cases making labor actually possible). Land, labor, and capital necessitate each other.

Also, it can be seen as a mistake to assume that socialism is the categorical opposite of capitalism. It can be argued that socialism is just a restrictive form of capitalism that has yet to come to the understanding economic freedom leads to prosperity. They are former radicals who employ conservative means to try and achieve liberal goals.

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You are confusing a workman's tools with capital. Theoretically you might be right but an artisan without tools is a nobody.

Pierre-Joseph Proudhon, who described himself as a mutualist but was later abused for being a socialist, argued that a workman's tools were not capital and neither were a peasant's fields. Without their means to produce they could not be the people they were.

This is a clear statement that there is no practical difference between capitalism and state socialism as under both the product of labour is expropriated from the labourer and bestowed upon another entity whether that be an individual or a state actor. As far as the worker is concerned he or she is left with a pocket of change to live on until next week.

I used to get into a lot of trouble from socialists on this point as I saw the collective as a group of individuals with different strengths and weaknesses being made greater through cooperation than just a sum of the parts. I used this technique as a manager much to the chagrin and hatred of other managers with a more hierarchical approach.

-isms are just philosophies that become moderated by reality. What really matters is what works and that happens best when all have a decent stake in the enterprise however it is defined. The problem is hierarchy. The solution invariably lies in a generosity of spirit.

Voltaires Hat said:

Coming from a science background myself I often think about this. The ability of individuals in our species varies wildly among a wide range of traits. Ideally a combination of our traits allows us to thrive, but that's not always the case, and other times a combination of our talent and luck produces exceptional results.

An interesting case study is my dad and his siblings. Five kids, same parents, same school, same community, but wildly different life outcomes. The variation in innate ability of my first cousins on his side couldn't be wider. My dad has three grand-children, while other siblings / offspring are in near poverty. An obvious subjective, ethical diliemma arises from this: do I deserve more because I can naturally create more wealth for myself? Do others who weren't so lucky deserve what I've earned? And if so, to what extent? Perhaps, along with sustainability, that is the central question we need to understand, but is also one that doesn't really have an objective answer.

So on some level I wonder if disparity in outcome is an inbuilt feature of our species, unavoidable, and that our history is/will be permanently marked by power struggle.

At this snapshot in time I believe what we're seeing are communities that, for the most part, reward those who know how to exploit their environment (which is what we would expect of any animal). And it's difficult to change this because those with that ability are the power holders, the powerless have little political muscle.

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This is the old dilemma between inheritance and environment. The reality is we are all different and face different challenges in life.

I am one of six cousins. We are now all in our seventies and three are dead. One was a well-recognised head of a university biology department. Another founded a cancer charity and funds cancer research. Another inherited his father's large business and led it nowhere. Another was a teacher and preacher. Another was a very capable businessman who never hit the right opportunity. Then there was me, a political activist and historian turned supply-chain specialist. You have to go back to parentage for this to make any sense. Our common grandparents were a self-taught mathematician and general dealer who ran street betting when it was illegal and a sustaining, knowledgeable woman who had worked in domestic service but who died too young from cancer. Make of that what you will. There are common threads in there, but each is unique.

One interesting thing though is I had an ancestor back in the early eighteenth century who was a steward to a ducal family. I have been fortunate to read a lot of his correspondence and found I did much of the same as he in my time.

stanilic said:

You are confusing a workman's tools with capital. Theoretically you might be right but an artisan without tools is a nobody.

Pierre-Joseph Proudhon, who described himself as a mutualist but was later abused for being a socialist, argued that a workman's tools were not capital and neither were a peasant's fields. Without their means to produce they could not be the people they were.

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Tools are capital, so there is no confusion. Mutualism is just a school of thought within the economic field of socialism, one that falsely bifurcates private property and capital.

stanilic said:

This is a clear statement that there is no practical difference between capitalism and state socialism as under both the product of labour is expropriated from the labourer and bestowed upon another entity whether that be an individual or a state actor. As far as the worker is concerned he or she is left with a pocket of change to live on until next week.

I used to get into a lot of trouble from socialists on this point as I saw the collective as a group of individuals with different strengths and weaknesses being made greater through cooperation than just a sum of the parts. I used this technique as a manager much to the chagrin and hatred of other managers with a more hierarchical approach.

-isms are just philosophies that become moderated by reality. What really matters is what works and that happens best when all have a decent stake in the enterprise however it is defined. The problem is hierarchy. The solution invariably lies in a generosity of spirit.

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There is clearly a difference between the two. Capitalism, even by the Marxist terminology, is the free buying and exchange of goods/services by private individuals. State socialism is the state's ownership of means of production. Clearly a difference.

Faramir said:

The part I have bolded today seems to reflect a certain level of wealth in society who instead of realising they have succeeded in life are instead competing with each other in who can outdo the other in terms of displaying wealth. They also seem impervious to economic cycles. This is recently come into the public recognition as the 1% vs the 99%.

I have read at a time much earlier in US society that companies had a moral outlook in that the CEOs should not earn more than x 20 the lowest paid worker.

That seems like a good idea to me though shareholders in those same companies might not agree.

Click to expand...

I agree with you here. Of course Polybius was writing in the period when the Roman Republic was in free-fall. That was something Polybius recognized and, using the decline of Sparta as a template, predicted the decline of Rome as well.

There is a pretty consistent characteristic of a political system in decline where wealth concentration far exceeds the natural inequalities inherent in both human capabilities and luck as ruling elites manipulate, to their own benefit, whatever economic system is in place at the time. Giambattista Vico recognized this problem too when described his ideal eternal history colorfully with this axiom: “Men first felt necessity, then look for utility, next attend to comfort, still later amuse themselves with pleasure, thence grow dissolute in luxury, and finally go mad and waste their substance.”

Of course, my phrase “natural inequalities” is highly subjective and efforts at economic manipulation are always on-going, but there are clearly periods in history where traditional norms are badly violated. Polybius’ era was one of those periods and I believe the current era is another – with the U.S. being the current poster child for the process because empire and its attendant militarism are usually components of the social changes that fuel the violations of existing norms. Very few American traditionalists have recognized how destructive to tradition war has always been.

For me the question is what it the primary tool of those that manipulate the economic system? I believe it to be the coercive power of the political state, while many, many others believe it is wealth itself.

Keep said:

Consider how dangerous ancient Greece or Mesopotamia were. There, states were presumably created by people banding together out of a simple need to defend themselves and their crops from human predators. Yet, they weren't "capitalist" by any stretch of the imagination.

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What do you mean by Greece and Mesopotamia not being capitalist? I always thought capitalism was just a descriptive term for the default state of markets when not under various social controls of one kind or another. Do you mean that Greece and Mesopotamia did implement extensive market controls, or is there more nuance to the term capitalism about which I'm a bit ignorant?