On Capital, Maps, and Terrain

I recently stumbled across a screenshot of this classic old tweet from Arthur Chu:

Whenever such an observation appears on social media, it inevitably provokes a storm of responses along the lines of “workers wouldn’t be able to make anything if they had to make their own parts and tools.”

For example, as part of a spate of articles in June celebrating Adam Smith’s birthday, Reason published a cartoon by Peter Bagge in which the ghost of Smith eavesdropped on a conversation between Karl Marx and Friedrich Engels. In response to Engels’ enthusiastic (complete with scowl and pounding fist) proclamation that “it’s inevitable that private property will be eliminated… after which workers will run the factories themselves,” the perplexed Smith replies “They will? How? How will they repair, expand, and improve those factories? Doesn’t that take capital?”

More recently on Facebook, someone posted a meme about a worker churning out 3000 widgets an hour but being able to buy only three of them with their hourly wage. The replies were filled with comments like “Using a machine that costs $100K,” “in a plant that cost $25M to build,” and “you can’t make 3,000/hour without using someone else’s machine and factory”… In short, the same reflexive responses that automatically pop up in defense of the role of the “investor” under any such meme.

Listening to these people talk about the indispensable role of capital, you might get the impression that capitalists actually construct the machinery themselves from bags of money.

But in fact workers do “make their own parts and tools,” or at least make each other’s parts and tools. Every step of the production process, going through not only the construction of the machinery and the factory, but all the way back to the mining of raw materials, is just human beings acting on the material world, applying their labor either on goods supplied by nature or on each other’s labor products. The investor’s money is nothing but a socially constructed ownership claim, that gives them the authority to coordinate and allocate the streams of production from the different groups of workers acting on nature. 

Now, I will stipulate that “socially constructed,” as such, does not mean illegitimate. Whether the paper claims to control the tools, parts, and production flows are legitimate is an entirely separate question. But even were the claims shown to be legitimate, that would in no way alter the fact that what the capitalist or the employer “provides” amounts to controlling access to a material artifact produced by labor. In other words, in purely material terms, the reality is exactly as Arthur Chu described it: it’s labor all the way down.

Apologists for capitalism, in attempting to counter Chu’s argument, mistake map for terrain. As people like Peter Bagge frame it, parts and tools are some kind of independent factor that came from some ultimate source other than workers. But again, nothing they say alters the basic, objective material fact that everything — capital goods included — is the product of human labor acting on nature. “Capital” is just a property claim on the right to control the production flows. To put things in terms of territory vs. map, labor acting on raw materials is the territory; capital and all the other -isms are just cognitive maps superimposed on that territory.

Of course, when it comes to the separate issue of whether capitalist property claims on the right to coordinate production and collect a fee for their “service” are legitimate, apologists for capitalism also have their arguments — among them “abstention,” “waiting,” and “time preference.” But these arguments do not stand up to scrutiny.

It’s telling that most such defenses start from the hypothetical thought experiment of some Robinsonesque individual who just happens to own some stuff and just happens to hire another guy to work with it, or from some similar simplified theoretical construct that’s abstracted entirely from the actual history of capitalism. 

When we examine the historical and institutional origins of those paper claims to direct material resources from one group of workers to another, we find that it is — like the feudal landlord’s claim of entitlement to compensation for the “service” of “providing” and to the cultivator — illegitimate and based on theft. The capitalist’s “contribution” to production is entirely a function of their ability to obstruct it — what Thorstein Veblen called “capitalized disserviceability” — given the distribution of power in a given society. The wealth on paper by which they “own” the means of production, and the credit system by which their “investment” is necessary to enable the different groups of workers to advance their ongoing production streams to one another, are no more legitimate than the feudal landlord’s claim to the land. 

Their origins, and the concentrated structure of wealth itself, go back mostly either to enclosure, or to the ongoing extraction of economic rents from artificial scarcities and artificial property rights enforced by the state. Virtually all large-scale profit today consists of unearned economic rent of one kind or another. Such income includes rent on absentee land titles, whose current concentrated ownership and distribution are the legacy effect of the nullification of peasants’ communal rights and mass expropriation of their land. It includes monopoly profits from the ownership of patents. And perhaps most importantly, the alleged need for the “capital” which the “investor” supplies, in order to undertake production, results from a credit system which treats money and credit as things that are “lent against” stores of stockpiled wealth rather than simple accounting mechanisms for coordinating production flows.

In making arguments like those of Bagge, apologists who attempt to justify capitalist ownership and profit also, inadvertently, equally justify state socialist systems like the former USSR. In the Soviet Union, workers couldn’t have produced anything without machines and factories owned by the state. But the leftist, anarchist, and socialist critique of capitalist ownership and profit also applies equally to state socialist ownership and control. The factory and machinery, under any system — whether corporate capitalism or state socialism — are actually made by workers acting on the products of nature.

Ultimately, we must abolish all artificial property rights, artificial scarcities, and other institutional claims which put a privileged class of people in the position of “providing” things actually produced by the labor of others, and in their place create a society in which all may enjoy the fruits of our collective effort and intellect acting on the free gifts of nature.

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Markets Not Capitalism
The Anatomy of Escape
Organization Theory