Capitalism is a force that has lifted billions out of poverty, where even poor remote villagers enjoy luxuries that would have been unimaginable to medieval kings. When someone takes a job, even the worst job, it’s because both parties expect mutual gain.
We often treat capitalism, freedom of labor, and free trade as inevitably going along with one another, but I’m not sure that’s correct. In this post you’re mostly talking about labor, not capital or trade. It may be worth looking into ways that these don’t always go together.
(By “capitalism” I mean the allocation of capital to firms through markets. By “freedom of labor” I mean the allocation of jobs through voluntary arrangements; as opposed to jobs being assigned through slavery, government command, family trades, caste, etc.)
For example: Some of the historically earliest firms to be traded in capital markets — colonial ventures like the East India Companies, Hudson’s Bay Company, etc. — employed slave labor and enjoyed legal monopolies on trade. So in those cases there was capitalism without either freedom of labor (for some, anyway) or freedom of trade.
Another example: Free-trade agreements such as NAFTA enable the free movement of goods and capital across borders, but not the free movement of labor. In contrast, political unions such as the European Union (or the US itself) enable the movement of labor as well as goods and capital among member states. So, similar policies on goods and capital can coexist with dissimilar policies on labor.
On our planet, free trade is only really possible with some military might defending it, because otherwise we get pirates or bandits taxing our trade and then it’s not free anymore. Similarly, we can only ensure freedom of labor by actually enforcing rules against employers who might otherwise use unfree labor.
There are gradations of unfreedom of labor, too. If you can’t leave a bad job because you don’t have savings or credit to tide you over till you find a new job, that’s a little bit of labor unfreedom. It makes the job market less efficient, because you can’t switch jobs to one that’s a better fit due to not being able to pay the search cost. If you can’t take a day off from your current job to interview for a new job, that’s a little bit of labor unfreedom. If the jobs available to you are strictly limited by your race, caste, or nationality, that’s quite a bit of labor unfreedom. If the only way to get a job that you otherwise fit, is to tolerate violations of your human rights by your employer (like sexual assault), that’s pretty significant labor unfreedom. If you are shackled in a basement and beaten for not peeling potatoes fast enough, that’s a lot of labor unfreedom.
One kind of thing we might want to describe as “exploitation” is using someone’s current form and degree of unfreedom to reduce their freedom even further; to deepen and maintain an asymmetry where you get more power and they get less and less. Making it hard for someone to seek a new job, in order to keep them in a job as it gets worse. Punishing workers for “disloyalty” if they try to negotiate for a raise or organize for collective bargaining. Blackballing through employer collusion (“you’ll never work in this town again!”). Debt-slavery.
I really like this thinking. I don’t necessarily like the assignment of labels to concepts in this post. E.g.: I use capitalism in a manner mutually exclusive with slave labor because it requires self-ownership. And I don’t think a definition of “exploitation” should require a strategic element; I would say that not allowing an employee to read mystery novels when customers aren’t around is exploitative. But this idea of using an asymmetry of power to deepen the asymmetry is a clearly useful concept.
I use capitalism in a manner mutually exclusive with slave labor because it requires self-ownership.
This seems like a sort of definitional gimbal lock; it makes it harder to describe the world because two potentially-separate degrees of freedom are collapsed into one. While I’m reluctant to argue definitions, I think it’s worth using terms in ways that allow us to describe the world in more detail rather than ones that collapse distinctions.
I expect to see this usage of “capitalism” not in history or economics, but in the sort of political doctrine where it’s intended to lock those concepts together; to imply that capital markets and individual freedom are either the same thing, or closely related — more closely, I think, than history and contemporary events really support.
It would seem weird to me, for instance, to claim that a publicly-traded company that is discovered to have done something to violate individual freedom is thereby no longer a participant in a capitalist economy. The New York Stock Exchange doesn’t ask “does this company infringe individual freedoms anywhere in the world?” before letting a company be listed. (To be clear, I’m not proposing that it should; I’m saying that it’s useful to talk about “participation in a capital market economy” and “fully respecting some set of individual freedoms” as distinct axes.)
(For what it’s worth, I think “self-ownership” is a pretty odd expression, because one of the central traits of ownership is that it can be transferred, and one of the central traits of selfhood is that it cannot. Your relation to yourself is distinct from property ownership in that you can sell any piece of your property, but you cannot sell your self; no matter what obligations you may have signed up for, you always retain possession of your self.)
Mostly agreed with what you say about the word “capitalism.” But with the NYSE example, I think it would be natural to say that the company did something not particularly capitalist. Is the CCP-owned Air China a capitalist entity? It’s certainly less capitalist than Southwest.
I think there’s at least two ways meanings can be combined. The easy one is words with multiple meanings. For example, “capitalist” has two meanings: someone who believes in free markets, and someone who owns a lot of capital. Some rhetorical tricks are played by trying to dance from one to the other, usually by denouncing libertarians as greedy corporates who benefit from the system. The second is concepts that include multiple constituents. For example, “capitalism” is a major concept that includes the things you brought up.
Inasmuch that capitalism is a centuries-old concept with a lot of philosophy behind it, I think it’s worth keeping “capitalism,” in its sense as an organization of political economy, to its broader meaning which contains both freedom of labor and market-based allocation. They are correlated enough to be a sensible cluster. We can use other terms for the constituents.
For comparison, “security” contains many concepts, such as integrity (untruster party can’t influence trusted output) and confidentiality (untrusted party can’t read input from trusted party). But we can talk about security as a whole, with other terms for its individual dimensions.
Perhaps it was a mistake to trust ChatGPT, but (my short summary of) its opinion is that Ayn Rand always gained her money by writing, i.e. selling her products directly to the market, while Adam Smith was employed at a university, in addition to gaining money from his books (especially the Wealth of Nations), and only gained a passive income from investing later in life.
(It’s not important; I am just sharing my data.)
EDIT:
I guess we need to distinguish between even more meanings of “capitalist”. Consider the following examples:
Person X buys a lottery ticket on their 18th birthday, wins a few millions, puts all the money in passively managed index funds, and spends the rest of life collecting generous passive income, watching anime, and debating online.
Person Y builds a small company and hires a few employees… the business is so-so, it pays the bills but is often at the verge of bankruptcy, fifty years later it finally goes bankrupt.
Which one of these is more of a “capitalist”? The latter spent more effort capitalisting, but the former had more capital and more profit.
We often treat capitalism, freedom of labor, and free trade as inevitably going along with one another, but I’m not sure that’s correct. In this post you’re mostly talking about labor, not capital or trade. It may be worth looking into ways that these don’t always go together.
(By “capitalism” I mean the allocation of capital to firms through markets. By “freedom of labor” I mean the allocation of jobs through voluntary arrangements; as opposed to jobs being assigned through slavery, government command, family trades, caste, etc.)
For example: Some of the historically earliest firms to be traded in capital markets — colonial ventures like the East India Companies, Hudson’s Bay Company, etc. — employed slave labor and enjoyed legal monopolies on trade. So in those cases there was capitalism without either freedom of labor (for some, anyway) or freedom of trade.
Another example: Free-trade agreements such as NAFTA enable the free movement of goods and capital across borders, but not the free movement of labor. In contrast, political unions such as the European Union (or the US itself) enable the movement of labor as well as goods and capital among member states. So, similar policies on goods and capital can coexist with dissimilar policies on labor.
On our planet, free trade is only really possible with some military might defending it, because otherwise we get pirates or bandits taxing our trade and then it’s not free anymore. Similarly, we can only ensure freedom of labor by actually enforcing rules against employers who might otherwise use unfree labor.
There are gradations of unfreedom of labor, too. If you can’t leave a bad job because you don’t have savings or credit to tide you over till you find a new job, that’s a little bit of labor unfreedom. It makes the job market less efficient, because you can’t switch jobs to one that’s a better fit due to not being able to pay the search cost. If you can’t take a day off from your current job to interview for a new job, that’s a little bit of labor unfreedom. If the jobs available to you are strictly limited by your race, caste, or nationality, that’s quite a bit of labor unfreedom. If the only way to get a job that you otherwise fit, is to tolerate violations of your human rights by your employer (like sexual assault), that’s pretty significant labor unfreedom. If you are shackled in a basement and beaten for not peeling potatoes fast enough, that’s a lot of labor unfreedom.
One kind of thing we might want to describe as “exploitation” is using someone’s current form and degree of unfreedom to reduce their freedom even further; to deepen and maintain an asymmetry where you get more power and they get less and less. Making it hard for someone to seek a new job, in order to keep them in a job as it gets worse. Punishing workers for “disloyalty” if they try to negotiate for a raise or organize for collective bargaining. Blackballing through employer collusion (“you’ll never work in this town again!”). Debt-slavery.
I really like this thinking. I don’t necessarily like the assignment of labels to concepts in this post. E.g.: I use capitalism in a manner mutually exclusive with slave labor because it requires self-ownership. And I don’t think a definition of “exploitation” should require a strategic element; I would say that not allowing an employee to read mystery novels when customers aren’t around is exploitative. But this idea of using an asymmetry of power to deepen the asymmetry is a clearly useful concept.
This seems like a sort of definitional gimbal lock; it makes it harder to describe the world because two potentially-separate degrees of freedom are collapsed into one. While I’m reluctant to argue definitions, I think it’s worth using terms in ways that allow us to describe the world in more detail rather than ones that collapse distinctions.
I expect to see this usage of “capitalism” not in history or economics, but in the sort of political doctrine where it’s intended to lock those concepts together; to imply that capital markets and individual freedom are either the same thing, or closely related — more closely, I think, than history and contemporary events really support.
It would seem weird to me, for instance, to claim that a publicly-traded company that is discovered to have done something to violate individual freedom is thereby no longer a participant in a capitalist economy. The New York Stock Exchange doesn’t ask “does this company infringe individual freedoms anywhere in the world?” before letting a company be listed. (To be clear, I’m not proposing that it should; I’m saying that it’s useful to talk about “participation in a capital market economy” and “fully respecting some set of individual freedoms” as distinct axes.)
(For what it’s worth, I think “self-ownership” is a pretty odd expression, because one of the central traits of ownership is that it can be transferred, and one of the central traits of selfhood is that it cannot. Your relation to yourself is distinct from property ownership in that you can sell any piece of your property, but you cannot sell your self; no matter what obligations you may have signed up for, you always retain possession of your self.)
I really like this phrase. :)
Mostly agreed with what you say about the word “capitalism.” But with the NYSE example, I think it would be natural to say that the company did something not particularly capitalist. Is the CCP-owned Air China a capitalist entity? It’s certainly less capitalist than Southwest.
I think there’s at least two ways meanings can be combined. The easy one is words with multiple meanings. For example, “capitalist” has two meanings: someone who believes in free markets, and someone who owns a lot of capital. Some rhetorical tricks are played by trying to dance from one to the other, usually by denouncing libertarians as greedy corporates who benefit from the system. The second is concepts that include multiple constituents. For example, “capitalism” is a major concept that includes the things you brought up.
Inasmuch that capitalism is a centuries-old concept with a lot of philosophy behind it, I think it’s worth keeping “capitalism,” in its sense as an organization of political economy, to its broader meaning which contains both freedom of labor and market-based allocation. They are correlated enough to be a sensible cluster. We can use other terms for the constituents.
For comparison, “security” contains many concepts, such as integrity (untruster party can’t influence trusted output) and confidentiality (untrusted party can’t read input from trusted party). But we can talk about security as a whole, with other terms for its individual dimensions.
Examples:
capitalist pro-capitalist: Ayn Rand
capitalist anti-capitalist: Friedrich Engels
non-capitalist pro-capitalist: Adam Smith
non-capitalist anti-capitalist: Karl Marx
You mixed pro-capitalists: Adam Smith actually made a lot of capital from investment, while Ayn Rand never had much money.
Perhaps it was a mistake to trust ChatGPT, but (my short summary of) its opinion is that Ayn Rand always gained her money by writing, i.e. selling her products directly to the market, while Adam Smith was employed at a university, in addition to gaining money from his books (especially the Wealth of Nations), and only gained a passive income from investing later in life.
(It’s not important; I am just sharing my data.)
EDIT:
I guess we need to distinguish between even more meanings of “capitalist”. Consider the following examples:
Person X buys a lottery ticket on their 18th birthday, wins a few millions, puts all the money in passively managed index funds, and spends the rest of life collecting generous passive income, watching anime, and debating online.
Person Y builds a small company and hires a few employees… the business is so-so, it pays the bills but is often at the verge of bankruptcy, fifty years later it finally goes bankrupt.
Which one of these is more of a “capitalist”? The latter spent more effort capitalisting, but the former had more capital and more profit.