No One is Talking About Capitalism — In Your Sense

If one’s goal is to have productive exchanges when the word capitalism is thrown into play, they must stop doing two things: naively assuming people are more or less on the same page when the term is used; and suggesting that one or another meaning of the word is completely wrong.

Some use the term to mean exactly the core of Gary Chartier’s “capitalism-1” and nothing else: an economic system featuring property rights and voluntary exchanges of goods and services. Others mean that core plus additional criteria — making the word into a package of ideas, set of conditions, or the interplay of various factors that create certain arrangements and dynamics. Still others use the word to mean the social, political, and economic system and forces we live with today — in other words, whatever we have now.

Each of these approaches, and many others, can be justified in different ways. Perhaps it would even be better if the term was dropped completely — proponents and detractors of their version alike would probably benefit from not chasing conversations in circles, and using words that capture their meaning and ideas more precisely.However, since the word is still being used, and probably will continue to be for quite some time, the next best thing is for those who use it to understand it means different things to different people. Developing a more sympathetic and learned understanding of how others use the term, and a more critical eye to some of the problems that come with how one uses it themselves, will help discussions move to the more important business of exploring what truly lies behind a preferred usage, improving the overall value of exchanges.

For Those Defending Capitalism as Capitalism-1

Those insisting capitalism means nothing more than “an economic system that features property rights and voluntary exchanges of goods and services” make life both easier and more difficult for themselves. Easier because this straightforward approach essentially just means a free/freed market. Hard because they often misunderstand that others don’t mean the same thing when using the word. They also — intentionally and unintentionally — use the term very loosely anyway, and complicate communication of their own ideas.

Those who use the word capitalism this way often jump to lecture others on the glories of markets when they hear any criticism against what others call capitalism. This reaction makes sense in cases where capitalism-1 is truly being put on the stand. Yet serious opponents of capitalism-1 in and of itself are relatively hard to come by. They are out there, but in the grander scheme of things, they are a minority of, at best, well-read, ideologues committed to wholesale alternative ideals of communal and collective socioeconomic arrangements with no room whatsoever for individual possessions and voluntary exchange.

What’s usually at play when many people bash capitalism isn’t even an indirect rejection of the fundamental principles of private possession/property and voluntary exchange. Typically, people are objecting to the more disturbing, objectionable, and inherently destructive and unjust aspects of the current order — such as capitalism-2 and/or capitalism-3, or another central feature.

Indeed, proponents of capitalism as capitalism-1 often miss the point of critiques against an order that incentivizes (and seems to inherently include) things like: corporations destroying the environment while hiding behind limited liability or a state program; a big business suing a smaller one into oblivion over intellectual property violations; financial markets being controlled and manipulated by a privileged sector that keeps getting bailouts; officers of corporations rotating into federal cabinet positions; and huge amounts of capital accumulation resulting in obscene amounts of social power and influence, just to name a few examples.

Typically, it’s here where the proponent of capitalism-1-but-nothing-more jumps to point out: the kind of things listed above have nothing to do with what they mean by capitalism; treating much of the dysfunction or injustice one observes today as part of the package deal of a “capitalist” system is simply incorrect; and, ultimately anyone doing so is at best mistaken and at worst arguing in bad faith. This counter, though it makes many who consider themselves capitalists proud of their teachable moment, is really just useless and cheap. Useless because it distracts from productive discussion that could be had about the problems with the current order; cheap as it also ignores many of the legitimate reasons capitalism means a lot more than capitalism-1 to so many.

Indeed, ample damage to the presentation of capitalism as the narrow concept of simply private ownership and markets has been done by proponents of this meaning themselves. On one day they use it to mean a very core concept, and on other days happily and sloppily using it as a catch-all for a broad picture of modern social and economic realities.

Consider that it’s easy (and correct) for the capitalist-1 to say it’s nonsense when some say everything wrong with the world is the result of capitalism — from a boss hiring someone and then abusing the power dynamic, through to the Iraq War. However, it’s also nonsense to claim everything good about the current order is the result of capitalism. Have an iPhone? Capitalism! Enjoying advances in modern medicine and healthcare? Well, ignore any other factor — it’s capitalism! Some guy in a developing country got a job? Forget the rest of the circumstances surrounding that, or the people suffering for other reasons — capitalism! Anything good happen to you today? Probably capitalism! And, perhaps the worst of the bunch, and the cause of so much over-generalization, implication, and inference: The USA vs. The USSR? Obviously, nothing more accurate than to describe that as a showdown between capitalism vs. communism! And guess what’s better? Guess what won the ultimate battle!?

Again, if someone uses capitalism to simply mean the core of “an economic system that features property rights and voluntary exchanges of goods and services,” then that’s fine. But, the smug insistence that their opponents aren’t using the term correctly amounts to much ado about nothing if they also use it as loosely as is convenient.

It is incumbent on one who means just capitalism-1 to not slip into broader meanings; always be prepared to present an explanation of what they intend with the term and what they don’t; and be more attentive to the fact that others often use the term more broadly.

This is precisely why self-proclaimed capitalists of capitalism-1 introduce a cringe-worthy non-sequitur by calling attention to the supposed “irony” of something like a “left-wing” artisan bashing capitalism online but later going on to sell 1,000,000 hipster bars of soap to earn their own riches. There is no contradiction — there’s just a difference in what is meant by a term.

For Those Critiquing or Rejecting Capitalism-1

Those who critique or reject capitalism in the form of capitalism-1 face the inverse of the above situation but the same conclusion: it is important to always keep clear that what is being discussed — in this case attacked — is the narrow and fundamental sense of the word. Slipping into broader meanings will distract from the fundamental contention with the core of private property and voluntary exchange, no matter what else follows.

For Those Critiquing or Rejecting Capitalism-X

For most others, going after capitalism means criticism of additional conditions that bring about a certain order stacked on top of the core of capitalism-1. In this case, it is crucial that anyone going this route understands that how productively they can communicate and how much they cover with the term capitalism are inversely related.

It is one thing to present a meaning of the term for discussion that is still relatively narrow and manageable — e.g., capitalism as “an economic system that features a symbiotic relationship between big business and government” or “rule — of workplaces, society, and (if there is one) the state — by…a relatively small number of people who control investable wealth and the means of production.” However, it is quite another to start mixing and matching several ideas on top of the narrower concept of capitalism-1, labelling that as capitalism, and then building a critique or rejection of it.

This is not to say it can’t be done — that’s beside the point. Anyone reading this essay, for example, can think of their own conception of capitalism, and from there critique every element of it. Yet, to do so productively is a challenge. There is the ever-present risk of slipping into broader meanings than the one intended, and the risk is amplified  by starting with a meaning for a term that is already relatively broad. The package-deal definition of capitalism will have one running around trying to patch every leak in the hull of a ship riddled with them. They will be spun in circles on their own conception of the word depending on whether they’re talking to someone who means capitalism more narrowly or broadly, agreeing with them or not.

Furthermore, one going this route must be prepared with a coherent case of how their conception of capitalism relates to the core of capitalism-1. In other words, if others agree with calling a certain collection of concepts and ideas capitalism proper, then the onus is on them to explain how the basic core of private property and voluntary exchange plays into everything else. Does capitalism-x necessarily follow from capitalism-1? Or, is the claim that it’s likely to? Is the idea that capitalism-1 doesn’t have to lead to capitalism-x, but often does when certain factors are present? Should the negative elements of capitalism-x lead others to reject capitalism-1, or is capitalism-1 acceptable as long as the other elements aren’t in effect? Or, perhaps, you’re using capitalism in a way that doesn’t really have capitalism-1 at its core. All are subtle, yet crucial, wrinkles in the story that, when ironed out, benefit one’s own thinking and provide a clearer presentation of what is part of, and implied by, an often opaque bundle of ideas and observations.

Ultimately, anyone that wants to continue using a composite meaning of capitalism must always be prepared to present it along with an explanation of their meaning. If they find it takes a relatively long time to do so, patience for others listening and enduring is warranted. Perhaps the most helpful thing one could do is come up with the most precise and clear descriptions of each stick in their bundle that is capitalism, and how they relate to each other. No one will immediately understand the finished puzzle unless the key pieces are explained.

For Those Referring to Capitalism as What We Have Now

Whether the goal is to critique or defend it, using capitalism to mean what-we-have-now-in-the-world as far as systems of politics and economics — perhaps demonstrated by, for instance, the political economy of countries like Canada and the U.S.A. — is as useful as a general gesture toward a huge buffet table of very different foods when someone asks you what you will be eating for lunch. In principle, it is an answer to a question as it narrows things down from everything to something. In practice, it tells you nothing.

What does “what we have now” even mean if we’re taking it as synonymous with the word capitalism? That will change shape as people take whatever they want from the buffet of the present reality, set it on a plate, and present their lunch as “capitalism.” It will rarely be the same from person to person, or conversation to conversation. The reality of this approach is that nothing can be precisely and consistently meant by it. Different countries have their own internal political-economies, and their politics and commercial spheres necessarily integrate with the global social and economic order in different ways. Everything from corporate law, labor law, the dynamics of the commercial and business sphere, the setup of their government and bureaucratic functions of the state, and so on vary in every way from subtle (yet important) considerations through to major differences. One clean “way” the world works or another is hard to put a pin on.

Some who mean capitalism as what we have now, do accept this point to some degree and readily admit capturing the entire global order under one descriptor is tricky. Their response is often to narrow things down at least a little further by geographic region or some other common denominator. In these cases, what is considered capitalist are the societies and economies of “The West,” or the “Commonwealth Countries,” for example. However, this attempt still doesn’t eliminate a troubling amount of imprecision and difference. Take considering “The West” as capitalist, for instance. The U.S. has a much different political, economic, and social reality compared to many Scandinavian countries — this is incidentally a point both proponents and opponents of either regime can agree on. Yes, both have elements of private possession and exchange, but the one thing all the proponents and opponents on each side can agree on is that neither one is similar enough to warrant being thrown into the exact same category.

Trying to get specific when it comes to “what we have now” causes other problems too. What part of the picture of the existing world is inherently capitalist then? Is it the powerful commercial interests? Is it the state and the various frameworks it upholds? Is it the judicial system? Is it the overall social attitude many adopt or are conditioned with? If it’s specific bits of every element, then what does the interplay between them look like? And again, it is absolutely worth repeating, where and what systems in the world can be classified as capitalist meaningfully and to what degree, since it would necessarily be a spectrum at that point.

All of these problems apply equally to proponents and opponents of capitalism as “what we have now.” However, an opponent has just a few more to deal with. Is the state or some form of government salvageable from capitalism, or is the current spectrum of forms of government necessarily capitalist and therefore somewhat or completely illegitimate? The same can be asked of certain elements of commerce and trade. And the big one is of course whether what we have now needs partial reform, or if it’s inherently unjustifiable and should be entirely dismantled — and whether the former or latter, you again have to go piece by piece as the definition covers everything we have now.

For Those Wondering What We Can Do

Short of trying to create a world where one meaning of capitalism is accepted by all, what one can do about all the potential trouble and confusion caused by the word is one of two things.

On the one hand, one can ensure they’re being the most helpful to their own point and the conversation at hand by establishing what they mean by capitalism so their conversation doesn’t build itself on a foundation of mismatched planks and cross-purposes. Sometimes this will reveal that agreement can’t easily be reached for the meaning of the term, which opens interesting areas to explore in and of themselves. Other times, reaching agreement on what the term means in a given context or conversation creates the kind of common understanding necessary for people to present a perspective for or against something and receive the most relevant responses — getting to the core of a disagreement, or even revealing that there’s less contention on certain points than one might have initially thought.

On the other hand, the kind of problems outlined throughout this essay could be more easily addressed if more choose to stop using the word capitalism to identify the system of interactions they’re defending or critiquing, or as a stand-in for certain ideals. As noted earlier, both those defending and attacking the term would probably benefit from using other terms for clearer communication and accuracy.

Put another way, it would probably be better to see discussions on very important concepts and ideas with crucial differences and implications for people’s lives refer to a range of different terms like free markets, state-capitalism, neo-mercantilism, corporate power, predominance of hierarchical workplaces, arrangements of classes of managers or skilled individuals as socially dominant, and so on — instead of referring to the same things as capitalism, capitalism, capitalism, capitalism, capitalism, and capitalism.

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