As always there are corrections, rebuttals, and general responses submitted to me when I write and send an update. So I wanted to respond to those related to the last time. They all deal with the section on capitalism. I’ll paste them here and then respond to them one by one.
"I especially enjoyed your section on capitalism, since I study capitalism directly and indirectly in my work. I just read David Harvey's The Enigma of Capital: And the Crises of Capitalism, which I really enjoyed. A couple random thoughts and tidbits I've been learning that you may
already know and have taken into account (but if not, you might find interesting):
• Market economy is not synonymous with capitalism- one of my classmates said this to me while we were debating whether economic activity builds or can build 'civil society' in our Civil Society and the State class. Being around hippy-anarchist types all the time had influenced me to forget to differentiate between the two, and his comment (which in hindsight seems underwhelming to me) actually rendered me speechless for a moment (rare occasion).
This is true. Sometimes I use short-hand and don’t always write out what I mean. I was specifically referring to free-market capitalism. I wasn’t talking about a market, which does not have to be free or capitalist, nor a free market which does not have to be capitalist. I was specifically referring to free-market capitalism. So when I wrote a blog about whether the free market corrodes human character, I made sure to explicitly say free market capitalism or at least the free market as we see it today in its U.S. version. To summarize, I was specifically looking at markets that were free and specifically free markets that incorporate the accumulation of wealth and increasing financialization, specifically using the accumulation of wealth to build up a greater accumulation of wealth such that the means and the end and the motivation are all one.
• 3% Growth- I forget Harvey's explanation of why capital likes to grow at at least 3% in particular, but one of his main arguments about/observations of capitalism is not that it is a market economy, but that it it is a logic that perpetually invests and reinvests money to make more money (and then reinvest). The logic is to invest where one speculates there will be greater return ad infinitum, which means growth of profit/increasing returns is intractably embedded in the logic of capital. That is why I think it is problematic (as you mentioned) to try to add adjectives in front of capitalism. This does seem to be a fundamental, definitional aspect of capitalism, whereas social justice or environmental sustainability can only ever be addenda.
Exactly, you’re touching on the root of the problem with the various “adjectival forms” of capitalism. If the problem with capitalism today is something that is not fundamental, then it’s easy to change that part or branch of capitalism and give it a new name like neo-capitalism. But if the problems we experience with capitalism as a society are fundamental to what capitalism is or how we understand and practice it today (see next paragraph), then we need to look for radical changes. I use the term radical purposefully. Etymologically, radical means dealing with the root or related to the root. It doesn’t necessarily mean drastic or markedly unorthodox. What we have to decide, as a people, is if the problems we experience with capitalism are fundamental or not. If they are, we need a response that deals with capitalism at its root. Otherwise, we will continue to generate the same problems while dealing with the symptoms.
It’s important to emphasize that the definitions, understanding, and practice of capitalism has not been constant in its history. It has definitely changed throughout time. So I’m only dealing with it in its current version, today, specifically in the U.S. context, though there are similar contexts in other parts of the world.
The last point is that, today, a mechanism in which speculators invest where there is greatest return might require that we qualify “return.” Specifically, many speculators try to invest where there is greatest long-term return which is completely different than investing where there is greatest return, in general. The greatest return almost always is accompanied by the greatest risk and some capitalist speculators try to avoid the greatest risk. The ones who don’t mostly fall into the venture capitalism camp (sorry to use another adjective in front of capitalism). Experientially or anecdotally (among my friends), most people start speculating in the “greatest long-term return” camp. Perhaps, as a goal you want to accumulate enough wealth where you can simply invest where there is the biggest general return which implies the greatest risk which eventually maylead to venture capitalism.
• "The coercive forces of competition"- Harvey kept using this epithet almost anytime he mentioned competition. It highlights a general theme of the book, which is that perpetual growth and expansion and reinvestment of profits is not so much an expression of people's greed (which has been on the scene long before capitalism), but a necessity for people running businesses in a capitalist system. Economic competition is not necessary for a society to survive, but in a capitalist system, people running businesses really do face the reality that if they do not compete and grow and capitalize on innovation and reinvest, they will not merely stay small, but they will likely lose their ability to stay open.
The difficulty of Harvey’s point here is that it is both true, today, and yet, does not have to be (and was not always the case). It is true: if you don’t reinvest profit to innovate and attract new people and grow, in today’s world, you will stay small and possibly close down. And that is not necessarily related to greed. But let’s look at related questions to that process. How much of my profit should I reinvest? What specifically should I reinvest my profit in? How will I reinvest my profit? Should I reinvest my profit in a way which I consciously know will close down competitors forcing them out of business? Should I reinvest my profit in a way in which I consciously know will force competitors to sell to me or merge? Can I reinvest my profit in a way that is harmful to the environment? May I reinvest my profits in a way that adversely affects society and the emotional health of people? Should I choose to reinvest my profit in a way that closes down smaller businesses catering to a local or hyperlocal audience which I do not need? All of these questions and more go deeper down this “greed-less path of reinvestment” and show how greed can be involved in a “greed-less” process.
Corporations are smart entities. It’s not necessarily any one particular person or group. Every incentive is aligned to maximize profit, so it’s fair to say that this entity is greedy. It’s not a negative or positive statement (depending on your ethics); it’s just fact based on priorities. In fact, as a corporate executive or employee, you have a fiduciary responsibility to maximize profit for your shareholders. If you do not, the shareholders can sue you. So think of it like this.
1. Reinvesting capital to innovate, compete, and grow is not the same thing as maximizing profit.
2. Reinvesting capital to innovate, compete, and grow is also not the same thing as prioritizing profit above all else.
3. How you define profit can determine what you maximize. If profit is specific to me alone as a corporation and not to the people to whom I am selling or the society in which they live, it affects what I maximize, whether I am greedy, and the value I produce in society.
• Economy is how society puts food on the table- this isn't from Harvey, but a phrase that I like. Economic activity across time and cultures and societal sizes is fundamentally how society provides for itself so it doesn't starve to death, or doesn't die from exposure. People tend to equate economy with currency, or GDP growth, or competition, or businesses, but these things are simply not fundamental aspects of what economy is. It helps pose the question: how well is our society providing for itself?
I think this was my FAVORITE comment. I really loved that someone wrote this. It’s so true. How well is a society providing for itself? It has an aesthetic element and a philosophical and political one which is why we often speak of the political economy. What is the philosophy by which we determine the health of our society? What is the philosophy which guides us as we provide for society? What is the philosophy by which we measure how well we provide for ourselves? That is the question.
To quote one of my favorite professors, Professor Emeritus Cornel West, the true test of any democracy is how well the most vulnerable are treated. I would say the exact same for a true political economy, remembering that an economy is how we provide for ourselves. The true test of any political economy is how well the needs of the most vulnerable are provided. And that’s it. That’s the core of it all, the root of the problem. If economy is how a society provides for itself, free market capitalism as it exists in the US is doing a poor job.
Today because our economy is so tied to this artificial concept of money and the amount of it available in society, the economy is tied to the amount of currency (whether direct like cash or indirect like credit) and, even more, to the distribution of that money. This leads to one of the obstacles created by capitalism in the form which we’re discussing. This accumulation of wealth and use of money to make more money tends to create a highly unequal distribution of money and wealth in society. It doesn’t just tend to create a distribution in which everyone has enough and a few people have a super excess. It creates a situation in which some people have a super excess and some people have a super paucity. That’s the problem.