It wouldn’t be “profit over everything”, there would be less short term thinking, more investment in communities and general welfare. — Xtrix

I know you're using shorthand in the statement "profit over everything" but to try to spell out what I find to be pivotal to this: profit for whom?

I think most will agree that it ought to be “profit for those deserving of it”, harkening back to what initially was the satirical term “meritocracy”.

Current global economy works by selecting for, as you mention, short-sighted interests profiting over long-sighted interests. Pithily expressed in the dictum “greed is good”. So those who are most greedy then gain most profits and, in tandem, most power over the way things should and will be - selecting against most all non-greedy interests, this in the long term at least.

For instance, you have 10 corporations with stocks that compete. As it currently stands in the world we have, if one of these ten corporations desires to invest some of its profits in being non-toxic to the environment, it will make less profits in the short term. Stock owners will then tend to invest in any of the other 9 corporations, resulting in this one environmentally sound corporation loosing out and, quite possibly, going out of existence. The corporations with short-sighted interest profit at the expense of those with long-sighted interests, as so too profit those investors in stocks who don’t care about long-term consequences but about their short-term profits.

I find that governance - here tersely read as intent regarding future outcomes - of some kind is always in some way in control of economics - here tersely read as what resources are appropriated to whom. And never the other way around. As a more concrete example, the state always governs who has what in some way - taxation laws as one example - regardless of how de-regulative it claims to be. This in order for the state to maintain itself. Trouble is, there of as yet is no (one would hope democratic) global governance regarding things such as a globally uniform taxation policy, despite there being a quite global economy. Which results in those countries that are more long-sighted in their governance of economy tending to lose out economically to those countries that value short-sighted profits. Simplistically, any country that increases the taxes of ultra-rich corporations, for example, will have these same corporations migrating as best they can to countries where these taxations don’t occur (the same can be said of individual states in the USA), and so will lose out on profits from taxes - inevitably impoverishing its citizens. Globally, this general problem to me is most apparent in terms of corporations’ migration to countries with little to no labor rights, hence where corporations maximize their profits via exploitation of workers … leading to a global race toward minimizing labor rights.

At any rate, I tend to agree with you. But I don’t find the problem to be that of profit over everything per se (to the extent I'm interpreting you properly) but, again, that of the human-devised system we currently have (which will inevitably select for profit being realized for some human traits at the expense of some other human traits) such that what is selected for nowadays is short-sighted interests at the expense of long-sighted interests. Which those who seek to become wealthy must incorporate to so become.

For the record, I can’t discern any easy fix to the problem I see in current economics. Still mentioning it because I find there can be no resolutions if problems aren’t identified. Maybe tangential to OP, but still...

So yes, there will be some bias in any discussion of history. We can still put politics aside and agree on something as basic as the definition of capitalism, though. The only thing standing in our way is ego: the one thing that has always screwed leftists. — frank

Funny line but that's why these debates are pointless. You presuppositions are showing...

You presuppositions are showing... — Tom Storm

Which is what? Just curious.

You keep cracking me up, Frank.

You keep cracking me up, Frank. — Tom Storm

Ok. What presuppositions do you think I have?

What presuppositions do you think I have? — frank

I only said they were showing (in that example), not that I could see your entire outfit.

Here -

The only thing standing in our way is ego: the one thing that has always screwed leftists. — frank

But you knew that and this isn't about us. Maybe we can engage about some other shit later on.

Interest, or the realization of profit, or increase in capital. without having to produce anything, seems to be the essence of capitalism. Of course this notion of interest or, what is essentially the same thing, rent, is intimately connected with the concept of ownership. If you are deemed to own something, then you can legitimately lend it, rent it or simply hang onto it and hope to sell it for profit.

Interest, or the realization of profit, or increase in capital. without having to produce anything, seems to be the essence of capitalism. Of course this notion of interest or, what is essentially the same thing, rent, is intimately connected with the concept of ownership. If you are deemed to own something, then you can legitimately lend it, rent it or simply hang onto it and hope to sell it for profit. — Janus

Yes! :up:

:smile: And I should have added: usury has been around for a very long time.

And I should have added: usury has been around for a very long time. — Janus

:up:

The current problem, which some see as a crisis, for capitalism seems to be that the upward spiraling generation of mega-debt, which is acceptable only based on the premise that the future can be relied upon to be more prosperous than the past, seems to be sailing dangerously close to the wind, given overpopulation, resource depletion, habitat destruction, global warming and so on.

I think humanity has never been in a more precarious situation. Hopefully we'll muddle through, but I think the first thing that needs to be acknowledged is that no one is at the helm. There are no effective captains of the ships of state, and arguably never have been.

Programmatic or revolutionary thinking is doomed to failure in my view, and the only hope can come from full acknowledgement that the future cannot be predicted and controlled. But the conceit that it can and must be, and that otherwise we should be subject to the profoundest and most crippling anxiety and confusion. is deeply rooted in the collective psyche, I fear.

The current problem, which some see as a crisis, for capitalism seems to be that the upward spiraling generation of mega-debt, which is acceptable only based on the premise that the future can be relied upon to be more prosperous than the past, seems to be sailing dangerously close to the wind, given overpopulation, resource depletion, habitat destruction, global warming and so on. — Janus

Historically, mega-debts just disappear during large scale economic contractions. Capitalism magnifies natural cycles of growth and decline. During booms, capitalists seem undefeatable. During busts we wonder why we ever thought living this way was intelligent.

I think a new religion will eventually emerge and absorb concerns like environmental exploitation and global warming.

Programmatic or revolutionary thinking is doomed to failure in my view, and the only hope can come from full acknowledgement that the future cannot be predicted and controlled. — Janus

Why do you see this as paramount?

Interest, or the realization of profit, or increase in capital. without having to produce anything, seems to be the essence of capitalism. — Janus

But this is straightforwardly wrong. Interest has been around long before capitalism has. To imagine that interest is the diffentia specifica of capitalism is simply to ignore history and pretty much anything anyone has ever understood by capitalism. If you want to call that capitalism you can - I can't stop you - but you and I - and most of the rest of the universe - would then simply be talking about two entirely different things.

That said, there is a grain of truth that the OPs presentation is somewhat outdated. Something strange has indeed occured with the ascension of finance, which is the shift from commodification to assestization as the key driver of the economy. I mentioned this in my 'note on financialization'. It's true that this deserves to be further thought though, but the OP's focus was to distinguish markets from capitalism above all, rather than be a proper diagnosis of the present. We can talk about the latter of course.

but the OP's focus was to distinguish markets from capitalism above all — Streetlight

That's true. They aren't the same thing.

I think this is the first time in my posting on this philosophy forum that I have not successfully gotten the gist/understanding of the OP and further exposition on the OP on this thread. (I read the thread three times) And I don't mean to say that this is the fault of Streetlight. I mean, my reading comprehension, for some reason, is low when reading this thread. I take this seriously; and I don't have an answer. I'm sure this is a well thought-out thread. — L'éléphant

Damn. I tried to make it as clear as I could. @Tom Storm is exactly right to pick up the production/exchange distinction as the key to it all though. Maybe I should specify: "production" literally just means: the making of stuff. And exchange just means: the moving of stuff from one person (or entity) to another (and vice versa). And that one problem with thinking about capitalism is that alot of people think capitalism has to do with how stuff is exchanged, and not how stuff made. Or rather, where or what stuff is made for - for markets, or for other, social reasons?

The headache with capitalism is the concept of profit tied to the accumulation of currency. If the currency is connected to some real economic base then that makes sense in that its accumulation will be restrained by real world transactional value. However, when it becomes solely imaginary numbers, then the association with currency and profit is not truly capitalist.

Dollars, at heart, are just a measurement system like inches. However, I can design a building with limitations inherent to the actual construction materials. I can design a million mile high skyscraper for example, but no one could ever build it. So when you hear of "trillions" of dollars in national debt, you can immediately discern that the financial system that allows that is completely disconnected from real economic possibilities. It's no longer any kind of capitalism or even free market system, it's fairy dust.

Dollars, at heart, are just a measurement system like inches. However, I can design a building with limitations inherent to the actual construction materials. I can design a million mile high skyscraper for example, but no one could ever build it. — ASmallTalentForWar

Bingo. Money is an abstraction, divorced from anything real. Banks create virtual money.

A capitalist economic boom is a gambling casino. None of it is tied to anything real.

The headache with capitalism is the concept of profit tied to the accumulation of currency. If the currency is connected to some real economic base then that makes sense in that its accumulation will be restrained by real world transactional value. However, when it becomes solely imaginary numbers, then the association with currency and profit is not truly capitalist. — ASmallTalentForWar

Again, this is another thing that is straightforwardly wrong and ahistorical. Money is yet another thing that has been around long before capitalism.

So that's at least three things we can now say capitalism is not: markets, interest, and money (or finance rather). These kinds of confusions are fun to clear up.

Again, this is another thing that is straightforwardly wrong and ahistorical. Money is yet another thing that has been around long before capitalism.

So that's three things we can now say capitalism is not: markets, interest, and money. — Streetlight

What's with the preoccupation with hitting capitalism with one dart?

It's about profit. There are all sorts of activities that can result in profit.

To understand finance, you need to focus on the fairy dust, as the guy put it.

Again, this is another thing that is straightforwardly wrong and ahistorical. Money is yet another thing that has been around long before capitalism. — Streetlight

I think you misunderstand. I didn't say that money is capitalism. Specifically, I said that "profit is tied to the accumulation of currency." The concept of profit is central to capitalism, but it is not directly connected to the accumulation of money but to the production of an economic surplus that allows economic activity to expand and grow in real economic transactions from labor to production to consumption.

At heart, the implication is that money is the proper measurement of economic activity, but that is only true is the currency of transaction is limited by the real activity of an economy.

However, the vast majority of money produced in our economy is the result of a financial sector that does not need to be held to actual economic reality anymore because they can produce as much money as they want in the form of debt and that debt does not ever need to be repaid.

It's about profit. — frank

It is about profit, but it is not just about profit. And it's not about 'hitting capitalism with one dart'. It's about understanding the specificity of capitalism, rather than drowning it in ahistoricisms. Again, profit has also been around since forever, and is not specifically capitalist.

Four things capitalism is not: profit, markets, interest, and money. Can we add more?

At heart, the implication is that money is the proper measurement of economic activity, but that is only true is the currency of transaction is limited by the real activity of an economy. — ASmallTalentForWar

Again, holding fast to the distinction between exchange and production, this does not get to the heart of capitalism insofar as it tries to understand capitalism in terms of exchange. Like thinking of capitalism in terms of markets, this too is a common mistake, but it is still a mistake. But I will try and say something more about money and finance when I have time because clearly there is alot of confusion that stems from this.

Can we add more? — Streetlight

Yes. You can add "why things are made."

Capitalism is not specific. It is relative. Marx and Marxism supposedly are about communism and socialism, but in fact, Marx wrote almost exclusively about Capitalism. So communism in essence is one version of capitalism.

However, the problem is that none of us were alive in the 1700's to experience what the socio-economic system of the time was that was replaced. Essentially, capitalism is the attempt to separate economic power from aristocratic power. Prior to things like the French and Russian revolutions, ownership of land - the economic engines of the time - was reserved to or controlled by inherited noble and royal family lines. Also, the rights to produce certain goods was by an aristocratic or royal decree. In addition, mercantilism or protectionism restricted people from importing goods and kept the economy closed.

At heart, the revolutionaries wanted to free the economic system from the dominance of hereditary family control limited to national (or kingdom or realm) interests. Anyone that could raise the capital to produce a business should be free to pursue that - from building a factory to owning productive land free from royal tribute to importing goods more cheaply made in foreign lands - the basis of the entire shipping industry that grew up in the 18th and 19th centuries.

Then Marx pointed out that the original owners of the new capitalist endeavors or projects would become a new and even more pernicious form of aristocracy - oligarchs - than the one that the revolutions decapitated. Merchants and mill-owners would be the new nobles and kings but not restricted by any social compact between king and commoner.

You can't really define or understand capitalism unless you look at what its original proponents intended it to replace.

Essentially, capitalism is the attempt to separate economic power from aristocratic power. — ASmallTalentForWar

True again. But this is Eurocentric, isn't it? Or should we think of capitalism as an entirely European invention?

But this is straightforwardly wrong. Interest has been around long before capitalism has. — Streetlight

The essence of capitalism is capital growth or profit, over and above any growth in actual products. Once ownership became established then usury was conceptually enabled. Usury just is capital growth without production. When was the "official date" of the beginning of capitalism according to you?

Historically, mega-debts just disappear during large scale economic contractions. Capitalism magnifies natural cycles of growth and decline. During booms, capitalists seem undefeatable. During busts we wonder why we ever thought living this way was intelligent. — frank

I don't believe mega-debts can simply disappear without consequence, even in the purely economic context. In any case, in the more encompassing ecological context under which the economic context is and should be understood to be subsumed, we are accruing a mega-debt to the environment, to the Earth and it's resources and other inhabitants, a debt which is indifferent to our current financial status in the cycle of "booms and busts".

I think a new religion will eventually emerge and absorb concerns like environmental exploitation and global warming. — frank

Such an undesirable thing may happen and "absorb concerns", but that doesn't mean the problem will have gone away.

Why do you see this as paramount? — frank

Revolutionary thinking is doomed to failure insofar as it seeks to wipe away existing institutions and infrastructures without understanding the consequences. Programmatic thinking is doomed to failure insofar as it seeks to impose new conditions from above. Both are based on the erroneous idea that humanity can predict and control its future.

The only thing which will help our situation is education and widespread individual change of thinking and orientation based on reasoned understanding of the human situation and acknowledgement that the future must remain pretty much unpredictable. Failing that, we're fucked; it's just a question of when; of how long the smoke and mirror show based on denial can be kept going.

True again. But this is Eurocentric, isn't it? Or should we think of capitalism as an entirely European invention? — frank

Well, yes, but only because it is specifically something that originated in Europe. Ironically, I'd say that Asian capitalism began with Imperial colonization, but really took off with communism. It is hard to think of any more rapaciously capitalist societies than Oligarchic Russia or today's China (more an innovation of autocratic capitalism) which both emerged from decades of communist rule.

However, is that simply the continuation of the cultural expectations going back to the Tsar and Emperor respectively?

The question remains if we have actually ever seen anything truly capitalist or if our societies are simply innovations on social power structures that we've always gravitated toward. Are we in fact still in an essentially feudal or Medieval society. Note, I do believe that the Middle Ages are much more similar to our present day experience than something like Imperial or Republican Rome or Athens or Pharaonic Egypt.

At heart, I think the ideal of capitalism is what Steve Keen learned was the "best and second best economy."

The best economy was a class of small employers competing for a class of independent employees. This would ensure the optimal wages for workers, optimal prices for goods and optimal profits for employers. The second best economy would be large conglomerated employers contracting with organized workforces. Basically, corporations and unions would ensure a volatile but sustainable level of wages, prices and profits. Not great, but better than what we have now.

Unfortunately, neither is truly realistic as every economic system assumes that the natural world will support it. As we're discovering with the current supply chain failures, the demands of a world based on physical principles does not easily support any economic system that assumes infinite abundance or scalability.

To understand capitalism, the first principle must be that it is not realistic. You can't look to the real world as the principle is inherently imaginary. However, that is true of any economic system. Capitalism only works because eventually everyone dies, so it doesn't have to work to provide for everyone - though theoretically it purports to. Politics follows this same principle. Eventually, the people who have serious problems will die, and those that survive didn't really have that problem, and the politicians declare that they solved that problem.

But your idea that using a process of elimination is valuable in understanding the concept. The original concept was that power and wealth are the rights of inheritance. The king leaves his kingdom to his son. The noble leaves his land to his heir. Whatever is valuable in a society - like land - is the sole right of a certain family claim.

So, to obtain power and wealth, one has to steal it often by murder from those that own it and then form a completely new dynasty. Obviously, this is very inefficient and ineffective. First, there is no guarantee that heirs will have the same capacity to generate such wealth, and it requires all sorts of wars and bloodshed for any innovation to enter the system.

Therefore, to add efficiency to the progress of economic prosperity, create a system where anyone with a good idea can obtain the capital (in practical terms funding, but in conceptual terms, the legitimate ability to take action) to manifest that idea and then let the freedom of his fellow individuals (in the market in practical terms) either take advantage of the idea to their benefit - thus, success and profit - or determine that it is not in their benefit - thus failure, but without bloodshed.

In this way, every one may prosper from the efforts of every other one. In its basic form, that is the declaration of capitalism. It goes hand in hand with the idea of democracy as opposed to aristocracy, but in reality, it often falls short and retreats back into basic chieftain mentality.

The essence of capitalism is capital growth or profit, over and above any growth in actual products. — Janus

But this is not true. Or at least, this remains only a partial truth, and far too abstract. One needs to make a distinction between the mere existence of capitalist enterprises and capitalism as generalized mode of production. It's true that capitalist enterprises - enterprises whose raison d'etre is to make profits - have been around since whenever. It really doesn't matter. What does matter is when social reproduction (the reproduction of society) becomes dependent on such enterprises, and relies upon them as a condition of their existence. That's the 'ism' part of capital-ism. This is broadly why one can make a distinction between feudalism and capitalism, even as instances of capitalist enterprise could be found all through feudal society.

In other words, capitalism in unthinkable without taking into account the securing of its conditions of reproduction. And those conditions are precisely the point at which the production process in general becomes 'subsumbed' - in Marx's words - to the capital. In yet other words, you cannot think about capitalism as an abstract schema ("capital growth and profit') without taking historical account of when such efforts at growth and profit became generalizable, reproducible, and, as they say, structural - i.e. when societies become dependant on such processes of generalizing and reproducibility.

Capitalism needs to be understood in materialist terms, not idealist ones. Usury may be capital growth without production; but without taking into account the material conditions under which such efforts at capital growth are reproducible, then you're just talking words, and not history, or, for that matter, reality.

Therefore, to add efficiency to the progress of economic prosperity, create a system where anyone with a good idea can obtain the capital (in practical terms funding, but in conceptual terms, the legitimate ability to take action) to manifest that idea and then let the freedom of his fellow individuals (in the market in practical terms) either take advantage of the idea to their benefit - thus, success and profit - or determine that it is not in their benefit - thus failure, but without bloodshed. — ASmallTalentForWar

In the depths of feudalism, the lord is a warrior. He feeds his army on the spoils of war. The clergy is holed up in monastic fortresses. Everyone else is a serf: bound to the land and restricted by custom and religion to a life of slavery.

The crusades injected change. The influx of goods from the middle east woke Europeans up to their low level of civilization. The feet that beat down those trade routes belonged to the ancestors of the European merchant class.

They found freedom from servitude in profit-making. Their markets became cities. They tore down Christianity and built back a version that accepted them as being just as human as the nobility.

It wasn't about efficiency. It was about becoming human.

I agree with you that capitalism has become more and more widespread, nearly universal, as a socio-economic model and practice; and I haven't said otherwise. This is now so deeply entrenched that I think there is little hope it will change; not as we might want it to and certainly not rapidly. This is because there is no clear figurehead which represents it which could be overthrown, as was possible with feudalism.

So, as I see it, sweeping, rapid change is unthinkable and not worth wasting any intellectual effort on. The only way to effect any (modest) change at all will be from within the system itself. The system is now a juggernaut which cannot willfully be stopped, although it could indeed collapse, and inevitably will, if we don't address the problems of overpopulation, environmental pollution and destruction, resource depletion, impoverishment and destruction of soils, global warming, etc, etc. Problem is we can't predict when or how that will happen, so for the time being it is possible to remain in general denial.