The Two Senses Of Capitalism
There are actually two definitions of capitalism in common usage. When those on the right use the word, they generally do so in a positive light. Those on the left use the word most often in a disparaging fashion. The problem comes in that both sides have forgotten that they are in fact talking about two different concepts. In their collective minds, these two ideas have been conflated into a single chimeric entity–one that is anything but coherent. Conservatives find themselves championing a concept that should by all rights be anathema to them. While leftists use one logical argument where at least two are necessary.
Capitalism in its original definition is an economic term. It refers to a system in which production, distribution, and exchange of wealth are in the hands of private individuals. Essentially, the free market.
The newer definition, beloved by leftists, comes from the writings of Marx, and refers not to economic, but political organization. His definition of capitalism was tied to the hated bourgeoisie. It referred to a society in which political power was controlled by the wealthy. In other words (and I wish Marx had used this other word), he was referring to plutocracy.
His misuse of the term was compounded by the fact that in his writings, Marx regularly railed against both economic and political capitalism. However, close reading would suggest that he himself viewed them as two separate concepts. Marx was a rather intelligent individual, and I can’t help but think that this association was more than a little intentional. By leveraging the natural antipathy of the common man toward the rich against the theoretical and practical superiority of economic capitalism, Marx was able to kill two birds with one stone.
But–unlike his economic views–Marx’s critique of political capitalism (plutocracy) was more than valid. Any system in which political power devolves to a privileged group brings with it a recipe for tyranny. This is a lesson well-known to those classical liberals who have spent time pondering the rationale behind their political philosophy. It was a lesson held dear by the Founding Fathers. And, indeed, it is the greatest fault of democracy that a group of people can use government to create privilege on the backs of others through their voting power.
If most minarchists are like the author, they see conservatives as individuals who took a rest stop on their journey to political enlightenment and ended up putting down roots right where they lay. While their social views are perhaps their most obvious shortcoming, their failure to separate political and economic capitalism is perhaps more worrying.
When I was younger, I used to refer to myself as a ‘regular joe conservative [RJC]‘, as opposed to the ‘rich white guy conservative [RWGC]‘. Although our political positions were often quite similar, I came to realize that RWGCs saw government as another tool to garner them both prosperity and power. In this sense they were no different from any other power-grabbing group, and I ultimately came to feel that their desire for power far outweighed our political similarities. Among other things, it took me one step closer to severing my relationship with the Republican Party.
The RWGCs are a much bigger threat to liberty than the RJCs in my opinion. We have them to thank for the degree that corporations run our government. For their favoritism and for the creation of more than one unnatural monopolistic corporation. RJCs would be much more likely to see and understand this if they understood the difference between the free market (which they tend to be fans of) and plutocracy. Unfortunately, in many cases they are just as confused as leftists are about the term ‘capitalism’. All too often I hear RJCs praising political capitalism in the same way they do economic capitalism.
And although I’ll only mention them in passing, but the leftists would do well to remember that they can interfere with the market all they want, but so long as the people they put in power continue to be rich and privileged, all their talk of the ‘common man’ and the underprivileged will be for naught.
To the author: Who are you and what did you do with the real IC?
Good job, excellent piece.
Comment by intellectimpure — August 24, 2006 @ 5:48 am
Capitalism is problematic. A free market always condenses through mergers and aquisitions to fewer and fewer overall “owners”. Further, investment in stocks and bonds creates additional wealth for the wealthy on the backs of the worker. That being said every attempt at Socialism has put into place a ruling “class” that immediately becomes the bourgeoisie, worse though, is that this “class” hasn’t earned it.
Comment by John Eyler — August 24, 2006 @ 1:21 pm
John said: “Capitalism is problematic. A free market always condenses through mergers and aquisitions to fewer and fewer overall “owners”. ”
That’s the biggest load of crap I’ve heard in awhile. While that might be true for some markets under some conditions, there are plenty of situations where capitalism leads to more overall “owners”. Take, for instance, a market that has (a) high profit margins and (b) non-prohibitive start-up costs. It’s only a matter of time before entrepreneurs attempt to get a piece of (a). The end result will be less consolidation instead of more. The problem with government interference is that it often leads to higher (b), which prohibits new blood from entering the market, in turn creating big-company dominated markets.
Comment by Bret — August 27, 2006 @ 4:34 pm
I agree with you wholeheartedly on this, but unfortunately, I don’t lack the mental energy to form coherrent verse on it. I’ll give it a half-assed attempt…
An even more lewd distortion of “capitalism”, which you didn’t mention directly, is how they interpret “persuit of property” and the Constitution as a whole as encouraging this plutocratic behavior - ie, the “neocons”. They take the Constitution and abuse it as justification for all the over-reaching bearucratic chains which hold most people down, while using their connections for power… I was going to write something more about the Constitutional dichotomy of definitions within the Conservative school of thought on my blog, but I can’t seem to find the (substantial) draft I had written up…
Oh, and the RJCs aren’t a threat to liberty - they -are- librety, in a sense. I think the neocon/RWCs are an equal threat to the sedicious leftists; in fact, they’re often in cahoots, as they want the same thing: more power. Behind the scenes, their mechanisms are also much the same. The “public eye” differs a bit, in that the neocons opt for more “facsist” forms of control and manipulation, while the leftists opt for communist means. Ultimately the same thing in the end.
Best piece you’ve written so far… I’m linkin’.
Comment by Caimlas — September 5, 2006 @ 6:32 am
The Two Senses Of Capitalism
There are actually two definitions of capitalism in common usage. When those on the right use the word, they generally do so in a positive light. Those on the left use the word most often in a disparaging fashion. The problem comes in that both sides have
Trackback by BoiledFrog.US — September 5, 2006 @ 6:35 am
Capitalism is problematic. A free market always condenses through mergers and aquisitions to fewer and fewer overall “owners”.
Some will claim I’m a seditious commie for making a statement like this, but this is why I think it’s a Good Thing (indeed, a very good thing) for the government to regulate it - reign it in and prevent it from abusing the free market system.
It’s also why I think the way modern corporations work is a Bad Thing. They shouldn’t have the autonomy of an individual without identical responsibility throughout their board of directors.
Comment by Caimlas — September 5, 2006 @ 6:39 am
[...] A vote for the Democrats is the same as a vote for Old Europe. Also known as the road to serfdom, socialist collapse, and totalitarianism. To vote for the Republicans is to vote for a strange combination of plutocracy, social authoritarianism, and a brand of big government all their own. Democrats fail to understand that if it requires coercion to maintain, then it can’t really be freedom. They also strangely see no problem with giving Government control of our economic lives, all the while whining about the problems faced by those without it. Republicans are unable to separate their personal moral views from their political stances. And neither party is able to understand the difference between political and economic capitalism. [...]
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