Comments Elsewhere

MDHinton,

If you want to lay down a precisifying definition for “capitalism” then of course you’re free to do so. My claim is merely that there are at least three major senses in which the word “capitalism” is commonly used which have more or less equally good claim to being “the” meaning of the word. So if you’re trying to understand what someone else is saying about “capitalism,” then it’s usually best to start by figuring out which of these things they mean. (Or, as is sometimes the case, whether they slide back and forth between meanings without acknowledging the change.) And if you are trying to make a point to someone else about any of the three things covered by the term, then it may be best to either use a modifier to make it clearer what you mean (e.g. “state capitalism,” “laissez-faire capitalism,” etc.), or simply to pick another term that doesn’t create the potential for confusion.

As for the definition you offer — “a process which I would define simply thus: investing one’s resources in order that they may grow” — seems to be an attempt to connect the word closely with the common use of the word “capitalist” (as applied to individual economic actors). That’s fine, but I think that you’ve made the definition too broad to quite line up with common usage. The textbook definition of “investment” is expenditure on capital goods, so if a “capitalism” is any process of investment aimed at profit, then that would include not only the factory-owner buying machines for her shop or the banker loaning money to businesses at interest; it would also include a subsistence farmer buying seed, a self-employed craftswoman potter buying a wheel, or a workers’ syndicate buying machines for their worker-owned co-operative factory. (In fact it would cover absolutely any form of economic activity whatsoever other than immediate consumption, anywhere, throughout all of history.) I think this is a mistake. As the term is commonly used, one of the distinguishing features of the capitalist is not just that she invests resources in acquiring capital goods, but that she then employs others to do some of the labor with those capital goods. Otherwise what you have is not capitalism per se, but investment simpliciter.

I’m well aware that individual capitalists often do lose out from government intervention. My claim isn’t that intervention produces net benefits for all capitalists everywhere; only that it tends, on balance, to produce net benefits for most capitalist enterprises. I mention some of my reasons for thinking that in my Fellow Workers articles; for more, I’d recommend Roy Childs’s Big Business and the Rise of American Statism, Gabriel Kolko’s book The Triumph of Conservatism: A Reinterpretation of American History, 1900-1915, and Kevin Carson’s Studies in Mutualist Political Economy. The basic idea is that capitalists as a class, and especially the largest industrialists and financiers, have played a decisive role in the formation and the direction of the regulatory state in the U.S. (as well as Western Europe and non-Communist East Asia). They did so because they expected to profit from it, by using State intervention to create and enforce a system of subsidies and bailouts for big businesses, interlocking cartels, regulatory barriers to competition, and captive markets. This happened through new licensing requirements, new trade boards, new federal commissions, etc. They also availed themselves of State power to capture, bureaucratize, and bring under control the rising union movement, with the radical unions destroyed through imprisonment, murder, and deportation, and the conservative unions established through State privileges as a junior partner in the “tripartite” system of Cold War economic planning, alongside Big Government and Big Business. The main winners from this process were not mainly the idle rich, but rather the chief investors in behemoth corporations such as Ford, GM, GE, Standard Oil, Bell, etc. It actually shouldn’t be surprising that they would be the winners, either: if going into a line of business means facing down a byzantine maze of licensing requirements, regulations, red tape, bureaucracy, etc., then a big corporation with a lot of money and a lot of credit and a lot of lawyers will have the resources to bulldoze through that barrier to entry. A little start-up or a group of independent workers won’t.

P.S. “Charles” is fine, if that’s what you prefer.