On "capitalism"

So, today I stumbled onto a Wikipedia article about “means of production”. I was there for silly reasons I won’t explain here, but then my eyes stopped on a pretty standard, familiar sentence in the middle of it, and suddenly something clicked.

I never understood why every single liberal and some conservatives would constantly toss around the word “capitalism”. I mean, I understood the immediate reason—they hated faulty parts of the free enterprise system—but I never understood what saying that word contemptuously was ever supposed to accomplish.

But then I stopped and reread this sentence.

Capitalism” is [the] mode of production in which the means of production are owned privately by a small class (the bourgeoisie) who profits off the labour of the working class (the proletariat).

What an unwieldy sentence.

The words I would typically say that in are:

“Capitalism” is a system where entities with money and resources pay for labour to get done.

In the second version, we have all the same players—the rich entities, their means of production, the workers, work getting done—but even as it says the exact same thing, that rich entities make use of workers to produce output, there’s a huge difference in framing between these two statements.

The first statement, which you could call the socialist view, assumes that the purpose of “capitalism” is only for the entities with resources to conspicuously consume labour and watch it churn out more resources.

The second statement, which you could call the capitalist view, assumes that the purpose of “capitalism” is to get work done. It suggests that while a lot of this work will be chosen by the rich entities, not all of it will—the hidden strength of “capitalism” is that whatever somebody out there will pay for can be called a job, and if you can just get money around, whatever work you want to attempt can get done. In this way, kickstarter and patreon are the real essence of capitalism, and being an artist is one of the most capitalism-fueled careers you could possibly choose.

Hmm, well that’s different…

Whatever happened to the exploitation of the proletariat and failure of capitalism in the first definition?

Well, they’re not really gone. Companies make bad choices about what work should be done and how it should be done, delivering weird products nobody wanted and knowingly paying workers low wages for various reasons. Crowdfunding pages fail to deliver on their promises, and that’s a distinct failure of capitalism to get done the work it said it was going to do. Internet ads. Internet ads are a weird and interesting failure of capitalism. Sites try to get advertising networks to pay for their work to get done, but then nobody wants to see ads.


If this is what “capitalism” means—a system which is supposed to promote opportunity by pairing demand for labour with the resources to make it happen, but in practice turns into rich entities making bad decisions—then what is socialism?

Does the word “capitalism” really describe the problems that socialism would like to solve, and could socialism really help get rid of the scourge of “capitalism”?

Well, here’s the Wikipedia sentence:

Socialism is defined as public ownership of the means of production so that the surplus product accrues to society at large.

That sentence isn’t nearly as “bad” as the first one. But just for consistency and comparison’s sake I’ll put it into the same sort of words:

Socialism is a system where the “entity with resources” should be the entire society as a unit. There should not be individual entities paying for their favourite projects; the society as a unit should take the place of all these entities in getting work done and aim to be sustainable.

So here we have at least a basic definition of socialism.

Some of the most obvious questions are:

  • How will society function as a unit?
  • How will this unit decide what work gets done? Can it possibly make decisions any better than the rich entities of capitalism?
  • How does one decide what is ultimately a better decision for the human race in the first place?

These obviously aren’t questions anybody has really solved yet, so hell if I can provide an answer.

But for the third one at least, it seems to me that a lot of people assume that main “rule” of socialism is that whatever decision is made, it had better be one that reduces poverty and suffering as much as possible. So, I’ll go with that.

What are the failures of “capitalism” that make people invoke its name, as if saying “Capitalist Modeof Production, you go to your room right now“? The main ones I can think of (aided by an internet listicle for the second half) are these.

  1. People do not have easy access to a single liveable wage; available jobs, which are increasingly hard to get, are often below this
  2. People do not have easy access to housing or healthcare, or in general, minimum requirements
  3. Food is wasted (a somewhat large amount actually) because nobody would buy it and there was no good way to recycle the waste before it went bad
  4. The “access” problems above can be worse for anybody who might be considered a minority
  5. Corporate advertising brainwashes us into willing consumers of mass-produced products who accept everything becoming commercialised when that may not be for the best
  6. The rich entities have a lot of freedom, the workers do not.
  7. Corporations have grown so big they’re starting to have more power over the world than national governments
    [I’m impressed, listicle. This is a pretty big-picture, perceptive one to pick and a problem that honestly scares me quite a bit, because there’s a thing called ISDS where corporations are basically trying to rewrite national laws to suit them]
  8. In lesser ways, corporations generally bend the rules around them so they can have their way, no matter what the effect on anyone else
  9. Capitalism makes environmental degradation “just make sense”

Now, one thing we need to get out of the way before any analysing this list is what capitalism and socialism are “for” and “not for”.

I’ve heard so many people say things to the effect of “capitalism is fucking terrible because it doesn’t help the poor”, which sometimes almost cracks me up to think about. The thing is, when you say that, you’re presupposing that the first point on the agenda of any economic system should always be “#1 – help the poor”. I’m not saying that’s a stupid assumption, but it sure does make anything that puts that bullet even as low as #3 look really bad. It’s basically kind of like this comic but for capitalism:

"For a fair selection everybody has to take the same exam: please climb that tree."
I was absolutely determined to find the original author of this image but can’t for the life of me. “Shared in New Zealand through someone else” is not a source, friend. Tsk tsk.

Capitalism wasn’t designed by people who love government intervention. It was designed without thinking about the implications of government being a thing that existed, for those messy details to be figured out later. So of course it doesn’t have any welfare programs built into it; that, in the minds of the Totally Relevant Metaphorical Capitalist Forefathers, was a thing that governments did. Later, governments attempted to add these programs. They incidentally turned out to be crap in America, probably because the same people that thought they should be government’s programs also didn’t like government doing things. (Nasty little paradox, that.)

So capitalism was never designed to be part of a government system.
What about socialism under the basic definition a ways up?

Well, we already said one major goal of socialism was to help the poor. But to say anything about government would require unravelling the extremely generic concepts in it. What does “the public owns the means of production” or its comparative interpretation “there will be no more rich entities that fund things, only the public/society” really mean practically?

Does it mean very literally that every single person/household individually produces most things they will need with their own equipment? That sounds a little impractical when you start getting up to sources of protein.

Does it mean something like public television, with programs funded by “viewers like you” as people see fit? That has an obvious problem: we (/I) already just defined crowdfunding as capitalism. It really is just another version of minorities with money exerting change, though they’re much more informal than corporations.

Does it mean a hierarchical system where means of production are carefully organised per community on different levels of communities to ensure nobody ends up in anything like a “food desert”? Does it mean a completely unprecedented amount of cooperation of all levels of government in a country to lay out everything important in the most efficient and least fuel-consuming way possible? Does it mean every city turns into a fantastical “green” geometric Tokyo where everything is very small and close together? Does it mean some kind of league of nations getting together and negotiating basically trade agreements to determine what regions major surpluses should be transferred to?

If any of those sentences remotely made any sense (this is all very new to me, I’ll admit), I’d say that surprisingly, the basic idea of socialism is as almost as detached from the specifics of government as capitalism. Indeed, you’ll end up at government eventually if you want to coordinate the public as a unit and build any major public structures, but the specifics of what government actually does seems fairly open to interpretation. Broadly, it would distribute resources—vaguely evoking old “redistribute the wealth” demons—but “distributing resources” doesn’t necessarily have to be a scary thing where some government Robin Hood has to come in and thieve them from somewhere. It’s just what every group of people planning a town anywhere has to do on the fly, but perhaps could do better.

So what about the major problems people associate with capitalism? Could any of those be solved through the huge weird system of logistics I just vomited out and am hoping is one acceptable description of socialism?

  1. If you’re really doing the “public funds public” thing right, somehow the people should be funded by the success of the system.
  2. Food waste would definitely be reduced if surpluses were being managed well. Government might simply buy surpluses and sell them elsewhere for the same price, communities somehow picking up the difference where people in need could not simply pay that.
  3. Ideally, housing and healthcare facilities would be distributed in a way that was easy to access literally. Figuratively, you’d have to find some way to incentivise people to go into healthcare, a tough field. With the way everything else is working out probably government would just pay them at a rate determined off the value one will provide on average. Clearly things start breaking down into standard capitalism a little bit here.
  4. Socialism would not really solve the problem of people disliking minorities. The rules on government would probably limit the amount of ‘fuck you’ any level of government could inflict on any region a lot, but logistics just can’t solve non-economic problems.
    Granted, you could probably use some weird analogue of the surplus thing to connect minorities to assistance for them, which, I dunno, might help.
  5. Under this system I’ve ended up describing everything would kinda still end up being commercialised but in a very different way from the stereotype of corporate logos everywhere. Like… everything would have a nominal value on it “in case” the government needs to buy surpluses and everything would kind of be thought of in terms of zero-sum accounting. (Actually, the system of value would constantly have the problem of balancing what is a good amount of compensation for stuff versus on the other side not wanting anything to be too expensive.) I could imagine ads a bunch of places for stuff that the government particularly wants to buy a lot of right now… a kind of weird reverse of corporate advertising.
  6. Governments in this system would definitely be bogged down in rules and obligations all the time in order to ensure they behaved, so the main source of power would not have a ton of freedom. Individuals… hmmm. I honestly don’t know. It’s hard to say how much people would just go along with producing the stuff that was needed without any nudging from the government. If they weren’t very enthusiastic, government might need to get creative in ways that weren’t really good, by like, requiring a certain town capable of making a product export some minimal amount of it. We know from communism in the real world that’s a highly dangerous road to go down.
  7. If companies were a thing they’d probably be getting input from governments at every stage of development so they would never really get above governments, hell governments could probably divide them up into smaller ones and send them elsewhere if they got big
  8. Companies would probably not be all that able to control the laws, at least as one entity. Depending on how democratic the process was their people might have a say, but the amount of cooperation required in government almost requires the system to be anti-democratic to some degree, since in a democratic system every subdivision could have its own opinion, none of these plans in line with any of the others.
  9. This doesn’t really either encourage or discourage environmental degradation. It’s kind of neutral. It could encourage better care of the environment, but it could also encourage exploitation of the environment to provide resources for people in need. It really depends on whether the governments would designate environments as needy along with people and plan accordingly or not

So, very theoretically, in a perfect world that had probably five times as many levels of government as we have now, a ridiculous amount of rules and cooperation among them, and where the bulk of major transactions passed through government as a logistics “matchmaker” that aimed to distribute things most efficiently, socialism might in fact be an okay answer to the problems everyone blames “capitalism” for.

…That is honestly not where I thought I was going with this essay.

We don’t live in a perfect world, of course. What does socialism look like in the real world, where we don’t have the luxury of planning everything from the ground up and executing the basic idea in the way that actually makes the most sense? (And of course, you aren’t guaranteed a hugely benevolent government like this and could totally end up with a dictatorial one?)

Well, one thing that can happen is socialism is simply taken to mean “welfare”. Forgetting the crucial ingredient of a means of production anywhere nearby (which doesn’t need to be a complicated factory, just some way to make a surplus of something somehow), people can simply be provided with a couple things like a small amount of welfare money and electricity, and no real opportunity to improve their situation. This is what an economics blog claims happened with Native American reservations.

Another thing that can happen is socialism is taken to mean government diverting funding from elsewhere for only one or two industries, while leaving everything else more or less alone to be capitalist. Namely, taking large taxes, and then using them to pay for universal education and healthcare. Claims are that besides nobody ever immediately liking high taxes, this has worked out fairly well in Sweden, Norway, Denmark, and Finland.

Finally, it’s hard not to mention the joke that was the USSR and communist China. A guy named Engels had this big, weird idea that you could have socialism without any central authority:

According to Friedrich Engels, who worked alongside Marx, socialism is the first phase of the revolution, in which the government plays a prominent role in economic life and class differences begin to shrink. This interim stage ultimately gives way to communism, a classless society where the working class no longer relies on the state.

(link above)

We’ve just seen through my odd little thought experiment in this post (if not through better examples) that trying to have socialism without government control is a little like trying to have English sentences naturally lacking vowels—it’s just not very possible. And yet, this was the basic, idealistic idea for communism before any real-world problems stepped in.

As far as I can see, the USSR and communist China basically never actually got past the socialism stage, doing basically the opposite of what that definition said you should do to achieve communism—soup up government control as much as possible and never let people forget the state ever. Communism, at least as it seems to me, was supposed to a self-governing system. I never realised before how much of a huge, gigantic contradiction “communist leader” was given a system where essentially all major leaders are supposed to be overthrown in favour of the most decentralised of governments you can have short of anarchy.

So what have we learned here?

  1. Socialism (as I’ve attempted to imagine it) is the economic system logistics experts would design. It’s only really possible period in a global economy, at which point we have already built way too many things to just start rearranging everything from the ground up and building a ton of new government levels out of nowhere in a way that would make it feasible.
  2. What the Nordic countries have qualifies as limited, realistic socialism. However, simply sharing and spreading resources is not socialism, and in a crowdfunding-type situation may in fact be capitalism.

    [It bugs me every time somebody tries to claim simply to be obnoxious that creative freedom advocates are “socialist” for wanting culture to be shared. What? Creative freedom is relying on the same principles as capitalist market forces, lowering the “cost” of reading a work on your freedom so that more people will “buy” it and your “yields” from making the work will be greater. Socialist art would be some governing body marketing art to entities that want it while paying independent artists, forcing the price in the transaction to be no lower than what the artists want. …Kind of like what record companies are currently pretending to do while not actually paying artists very much.]

  3. When you use the word “capitalism” as some kind of lesser curse word, you want the dissolution of rich entities making bad decisions—possibly in favour of turning the system around so instead of rich entities → production decisions, it’s production → government purchasing. However, this requires the very important condition that government’s decisions will always be at least somewhat good.
  4. In my random thought experiment economy, individual freedom went some very interesting places. People still had the freedom to choose an industry, but there was a definite threat of areas being boxed into specific specialities that might then dictate what choices individuals had available. Theoretically, poor people could be well-supplied, but might have even less individual choice in “with what” than under capitalism. The phrase “first world problems” might begin to have an actual meaning as government prioritised getting “important” products to them while marketing interesting products only to regions that were already doing okay.
  5. Communism is almost the opposite of socialism, but also a paradox that doesn’t really make sense.

If you’re going to blame “capitalism”, please at the very least know what the basic idea is. There’s a reason that people see it as a viable system, which is that transactions are extremely direct, going straight from entities that have resources to people who can be provided with jobs. This allows every person with any sense for how to get funding from a market (not easy, granted) to bring to the world whatever product or service they personally want to exist.

If you want to engineer an entire community from the ground up specifically to eliminate job hunting and bad jobs, you’d better be prepared to live in a world where individuals don’t dream of doing their favourite jobs and then make that happen, but simply search the world looking for the best government-advertised economy-balancing job opening available. Practical socialism is still as much based on equal exchanges as capitalism. Though nobody necessarily has to be forced to do it, somebody has to make socks for poor people; you might find much to your chagrin that everybody stopped doing climate science and working on climate change contingency plans because the government decided it was more important to cure lethal viruses in rural areas or try to find ways to make drugs cheaper, which is hard to argue with.

Maybe that’s the great amazing world you want to live in.

And you know what? Maybe the only problem with that is it doesn’t exist.

All I know is, compared to rebuilding the entire freaking world, it’s way easier and simpler for the next several hundred years to just make use of capitalism to effect the changes we most immediately want.