Thursday, October 1, 2015

What IS Capitalism, Anyway?

For quite some time now we’ve realized that when people use the term “capitalism,” very few of them are defining it in the same way as anyone else.  Obviously, this makes for no little confusion.  Ultimately we figured out that, where socialism is one thing under many names (the abolition of private property), capitalism is many things under one name.

Samuel Johnson didn't define capitalism.
This makes sense.  One of the dictionary definitions of “capitalism” is “a system in which production is carried out by capital.”  That really doesn’t tell us anything.  As G.K. Chesterton said somewhere or other, “If the use of capital is capitalism, then everything is capitalism” . . . which is pretty much the way many people understand it. . . .

We’ve been saying that Karl Marx and the socialists invented the word “capitalism” as a pejorative to describe a system in which a few own and go around oppressing everyone who doesn’t own, which is most everybody else.  It turns out we were pretty close.

The earliest known use of the word “capitalism” in the modern sense was by French socialist Louis Blanc (1811-1882) in 1850, two years after Karl Marx referred to “the capitalist system” in The Communist Manifesto.  As Blanc said, “[W]hat I call ‘capitalism’ that is to say the appropriation of capital by some to the exclusion of others.”  In other words, “capitalism” in its original modern sense meant a system in which a few own capital, and most do not — meaning that most people end up living on wages or welfare.

Faceless owner of capital.
The word “capitalist” in its modern sense seems to have been used first in 1633 in the Hollandische Mercurius . . . whatever that was; it sounds like a journal of some kind, possibly published in the Netherlands?  Everybody cites this, but nobody seems to know what it is. . . . rather like capitalism itself. . . .

Fortunately, we’re interested in the word capitalism, not capitalist, so we’ll bypass that little investigation.  You can go to the Wikipedia (which seems to be the source everybody is citing for this tidbit of information) and possibly find out more, but don’t hold your breath.

In any event, in 1867, possibly inspired by Blanc, Marx used the word capitalism twice in Das Kapital.  Being German, however, Marx seems to have preferred the more wordy “the capitalist mode of production” — which, again, calls to mind Chesterton’s comment about the use of capital . . . ambiguity, anyone?  (It also calls to mind what some Roman or other — Romans tended to pride themselves on the brevity of their wit — said about Cicero, that he never left a word unsaid.)

Anyway, the first appearance in English (according to the Oxford English Dictionary) was in 1854 in a novel, The Newcomes, by William Makepeace Thackery.  Thackery used it in the sense of “having ownership of capital,” which doesn’t really tell us much.

We could go on (and on, and on), but you get the idea.  Is it any wonder that we avoid using the word socialism or advocating the abolition of private property in capital as being against nature, and capitalism simply because no one knows what it means?

The Just Third Way
The “Just Third Way” can at least be clearly defined:  A system that adheres to the three principles of economic justice (participative justice, distributive justice, and social justice), and the four pillars of an economically just society:

·      A limited economic role for the State,

·      Free and open markets as the best means of determining just wages, just prices, and just profits,

·      Restoration of the rights of private property, especially in corporate equity, and

·      Widespread capital ownership.

There’s much more than that, however, but that’s enough to get you started, although you might want to visit the matrix comparing socialism, capitalism, and the Just Third Way.


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