The enduring insult of “Capitalism”

“The enemy of being is having” (Karl Marx)

Here we go again with some more Marx bashing, even though he did not coin the expression ‘capitalism’. He just popularized it. The word is rooted in Latin, meaning head. The one people loose when they are decapitated. Or the place where the head of the state resides: the capital.
It was used to head-count cattle. The number of (cattle) heads was your capital.

It was first used in an economic sense in the eighteenth century, describing the necessity of capital accumulation to engage in some productive activities. No moral content. Why should there be any? Most human activities have some prerequisites. When a peasant is tilling his field then sow some seed, it is a multilayer investment of his time, labour, the use of his beast of burden – that needs to be fed - and his capital of seed.

Investing in a machinery and a factory building, or seven trillion dollars (“f*ck it, let’s make it eight”) in creating Artificial General Intelligence is not qualitatively different.
But let me get back to this later…

Radical socialists started using the expression ‘capitalism’ in a derogatory manner in the early nineteenth century and its use became widespread after the publication of the communist manifesto and later Das Kapital. This is a graph of the trend of the use of the term:

The capitalism of Karl Marx

We could ask what is the reason for this ever-increasing popularity? Why did a ………….

I had to stop as I was to say “mode of production” realizing that there is nothing I can say about the economy without the heavily loaded terminology of Karl Marx, that hate-filled, self referencing, pompous and arrogant blabber.

Marx is the perfect example of the Humpty-Dumpty talk where words mean just what he chooses them to mean, neither more nor less. Just try to absorb the words in this quote:

“The capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property: in other words, the expropriation of the labourer.”

There is so much BS packed into this one sentence that it could take a lengthy post to properly dissect it, but let me try a short ‘translation’ if you will:

Advanced, high-productivity, low-cost manufacturing can only exist with the elimination of the high-cost, low-productivity craftsmen “mode of production”; making the displaced labour force available to become industrial workers.

It is still wrong, but without the pompous hysterics. The whole argument is standing on its head, but that is the least of its problems.
What we are talking about is what Joseph Schumpeter called “creative destruction”.
More efficient production methods are replacing les efficient ones.

When Marx says “mode of production” he does not mean any particular method of production, he means that “evil, greedy, resource hording, exploitative CAPITALIST way of production.”
There is no ‘annihilation’ and ‘expropriation’. The workers do not become the property of the capitalists and nobody’s ‘self-earned private property’ is ‘annihilated’
In the mind of Marx, those little people have absolutely no agency over their own fate and decisions. He couldn’t possibly imagine, that they chose their jobs because for them, with its regular salary, it was a step-up from the penury of subsistence farming.

Marx’s formulation is just a derogatory insult, an incendiary, moralizing judgement disguised as an impartial – and in his mind – even ‘scientific’ explanation.

Das Kapital is not an explanation of a particular kind of economic reality, but an impassioned justification and appeal for its destruction.

Without – of course – offering ANY viable, reasonable alternative. This post, however, is not about Marx. It is about his idea.

What’s wrong with capitalism?

Beyond the emotional baggage the expression got loaded with carries, nothing. But to understand we need to start with the root: capital. What’s wrong with it?

On a theoretical level, again, I cannot name a single thing. It is not right or wrong, it is just a thing – resources set aside for future productive use.
Capital accumulation, on the other hand, is a fundamentally positive thing. It implies delayed gratification, future oriented thinking, innovation, and a whole lot more prerequisites of a healthy and improving economy. Capital is not a good, but a essential tool of economic growth, which in turn is not a good in itself but a prerequisite of a better life.

It is interesting to see how capitalism is still pictured with images of gluttony, the greedy fat capitalists gorging on money. I have several images like the one on the top. Just as there are several books explaining how bad Capitalism is. The ‘sin’ of the capitalist is the personal consumption that his exploitative greed affords him. Even though this is never true. Most of rich people’s wealth is in capital investment. Bill Gates or Warren Buffet are not sitting on mountains of cash as the illustrations of greedy capitalists would want us to believe. Capital is productive capacity. The more we have, the better off we all are.

Which leads us back to the question I did not finish above: Why did a “mode of production” became so vilified?

The simple answer could be to suggest that it is just an outgrowth of the mean-spirited, negative sentiments of Marx himself, but that would beg the question why did Marx have them?

Consider the quote in the subtitle: ‘The enemy of being is having’. Marx idolized primitive human existence, which he called primitive communism. The innocence of this ‘classless society’ represented the communist garden of Eden. Marx saw history as a spiral going through class-societies ending up in a higher level of classless society in Communism. Everything in capitalism was an affront to this idea.

For most of history, people had well defined places in their societies. Yes, individualism did exist, but it was not the norm and was still expressed within well defined boundaries.
The rise of capitalism changed that, making individualism, entrepreneurship some of its most prized values. With that came a complex web of competence hierarchies and a whole lot of personal responsibilities. The burden of these responsibilities may be the source of the anti-capitalist sentiments.

As it is generally understood today, capitalism is the ‘kind of thing we have’ here in this rotten world of private ownership of the means of production. Every societal ill, every economic problem and political frustration is blamed on it.

Some of the problems are imaginary, MOST are political, but they have nothing to do with the capitalist ‘fashion’ of production. It has everything to do with the anxiety-ridden zeitgeist, which is actively exploited by politicians and the media.

In a world of ever-increasing complexity and responsibility, an ever-increasing number of people yearns for a world where their only ‘public’ responsibility is to conform, to fit in, to disappear in the crowd. They resent individualism for providing an alternative at a cost – personal responsibility - which they are not willing to pay. Their ideal world cannot come about as long as the alternative exists.
Hence the call chanted in protests with increasing frequency:

There is only one solution – a communist revolution

It all starts with the insulting, deriding and dissing of capitalism.