Capitalism


I was reading Larry White's chapter on The Road to Serfdom from his The Clash of Economic Ideas.  (Looks like a very good book, by the way.) I was struck again by how libertarians and socialists are usually talking past each other when they discuss "capitalism."

White notes that many on the left regarded fascism and Nazism as a "capitalist" reaction to the rise of socialism. Hayek disputed this, and said that both movements had more in common with socialism than with capitalism.

Well, what does one mean by "capitalism"? If you mean an economy with very little government involvement, then Hayek is certainly correct: the fascists and Nazis were perfectly willing to intervene heavily in the economy.

But if by "capitalism" one means "that system of political economy being supported by those who own capital," then the socialists had a point: these movements certainly had the support of many business owners, who thought it was better to be directed as to how to use their capital than to simply have it taken from them.

12 comments:

  1. I agree with your point. But, I wonder if that makes socialism/communism/whatever an empty concept. Suppose that owners of capital (not even business owners; maybe small-time savers) support a socialist movement? So, is that socialist movement now capitalist, and what would a socialist do about that (even if that movement led to the "ideal" socialist system -- for the sake of argument)?

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    1. "Suppose that owners of capital (not even business owners; maybe small-time savers) support a socialist movement?"

      No, I think the idea is that it is "capitalist" when the owners of capital are acting in their class interest: if they are expropriating themselves, then they have abandoned capitalism.

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    2. The left leaning people I talk to (i.e., an ML, an anarchist, etc.) over on the political board I belong to consider fascism to be late stage capitalism.

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  2. Ehh, I've pretty much given up on the word. Ditto for terms like "socialism", "communism", and "free market". "Intervening in the economy" never sat well with me either. I pretty much choose to use more unconventional phrases at this point (i.e., khakistocracy, stratocracy, autarky, etc.).

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  3. Speaking of this subject, Gene, did you know that Saudi Arabia was a command economy?

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  4. "car meant involvement"?

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  5. This is why, when I hear Republican rhetoric about job creators and minimum wage hurting businesses and so on and so forth, all I hear is Boss Logic; capitalism serves those with capital. Those are the people for whom this policy would hurt! Meanwhile in Detroit. Which is why I can never vote for that side. I have to at least support the normative underdog.

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    1. Why would a minimum wage hurt capitalists? Aren't their competitors living with the same wage floor? The only people a minimum wage law is likely to harm are consumers through higher prices, or laborers that get priced out of the market. I could see maybe where one capitalist benefits at the expense of another (ie, high-end producers benefit at the expense of low-end producers) but that's not hurting "capitalists" in the aggregate.

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    2. KPres, It is conceivable that a minimum wage might redistribute money from capital to the workers

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    3. Yes, a simple ROI calculation for the investor. If workers want to eek out a slightly more enjoyable/comfortable existence, well, why should I, as the investor, be the one to provide it? I'm only interested in making more money with the money that I have. That is the essence of capitalism, no? Well this logic winds up in the political sphere as rhetoric touting Job Creators or Trickle Down Economics, etc. Which is all nonsense, because those with capital are only interested in their capital, the protection and growth of their capital, and how their needs are met and serviced. Of course, once you enter the political sphere, workers actually count for something! And so it goes.

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  6. Right. Even capital has found away around minimum wage hikes, so in this way capital is still in control. And we can still ask whether that is a good thing or not.

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