13 June 2007

Wrestling With The ‘C’ Word

What’s the deal on capitalism? I have recently been thinking on this idea because I read an Orion article that does the usual capitalism bashing while advocating for the deeply spiritual value of work that is not tainted by the nastiness of mega-corporate soul-sucking greed. I posted three contributions to the discussion, then when it was getting interesting and I tried to post a fourth reply I was delivered an error message that said I was “not authorized to perform that action.” Since I want to consolidate my thoughts and have no patience for a stupid web site malfunction I shall vent my brain vapors here. [FYI- I succeeded in posting my thoughts of Jun 13th on Jun 28th and noted the cross posting.]

In my way of understanding what makes up a human society there are three basic components: consciousness, how we think about ourselves, others, the world and the relations between all of them; power, how we govern our own and other people’s behaviors for the common good; and economics, how we exchange goods with other people to get what we need.

In the article White refered to ‘capitalism’ but I can’t figure out what he really meant by the term except as a generic reference to all the bad things in the world today. We can’t stop exchanging with others to get what we need but he explicitly suggested that ‘capitalism’ is an all pervasive idea that must be eliminated without offering an alternative.

As best I can tell in the absence of a more concrete definition of what he meant by capitalism, it sounds like he was saying that “the humans among us” [a reference to what I take to be some elite group of people who are too enlightened to be either corporate slaves or masters] are the only ones who are really going to accomplish anything, and not by boycotting corporations or by being concerned scientists, but by living in some mysterious way that does not involve any of the bad things that capitalism does.

I wholeheartedly agree with most of his judgments about the bad things in the world today, but I believe the moral obligation of social criticism is to offer people more than a very long litany of complaints about the state of the world and just a scant few suggestions.

I appreciated his thoughtful reflections on how we play out the organizing principles of our society in modern work, but I want to discern the specifically ‘capitalist’ forms of exchange from other forms.

(end of first post)

(Since my thoughts continued to develop I took a stab at answering my own question about a week later.)

Capitalism, at face value as I understand it, is simply a system of allowing individuals to solicit the capital they need to start a business from anyone they choose with a minimum of interference by the government. Global corporate interests love to abuse the term “capitalism” as a catch all phrase for everything good about how they got to be rich and powerful. It appears to me that this abuse of the term gets inadvertently perpetuated by the opposition when they are duped into taking that bait and opposing the demon ‘capitalism’ instead of the immoral behaviors of the corporate interests. For those who abhor the behavior of global corporate interests to demonize “capitalism” as a description of those behaviors is to fail to recognize what is really going on and give global corporate interests the advantage in talking about the issue.

I am curious about the definition of capitalism because I suspect that the term is pretty useless if it is merely a code-word for all the bad things done by the companies that make up just less than half of our economic system.

“Fully 99 percent of all independent enterprises in the country employ fewer than 500 people. These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA). Some 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. By contrast, 47.7 million Americans work for firms with 500 or more employees.

“Small businesses are a continuing source of dynamism for the American economy. They produced three-fourths of the economy's new jobs between 1990 and 1995, an even larger contribution to employment growth than they made in the 1980s. They also represent an entry point into the economy for new groups. Women, for instance, participate heavily in small businesses. The number of female-owned businesses climbed by 89 percent, to an estimated 8.1 million, between 1987 and 1997, and women-owned sole proprietorships were expected to reach 35 percent of all such ventures by the year 2000. Small firms also tend to hire a greater number of older workers and people who prefer to work part-time.”

http://usinfo.state.gov/products/pubs/oecon/chap4.htm


Are anti-capitalists opposed to the following benefits of our current system?

“In terms of social cohesion:

  • small businesses serve as an entry point into the economy for new or previously slighted workers: women-owned small businesses, for instance, generate nearly a trillion dollars in revenues annually and employ more than 7 million workers;
  • small businesses increasingly generate entrepreneurial opportunities for minorities, which census data show as owning 4.1 million firms that generate $695 billion annually and employ 4.8 million workers;
  • small businesses bring economic activity to distressed areas: about 800,000 companies (90 percent of them microenterprises) are located in the poorest areas of the 100 largest U.S. cities;
  • small businesses offer job satisfaction and autonomy: studies show that most businesses are started to improve one's condition, rather than for lack of an alternative, with some half a million new businesses started each month.”

http://usinfo.state.gov/journals/ites/0106/ijee/leebaert.htm

I would be surprised if most avowed anti-capitalists are opposed to these kinds of opportunities for people. It seems to me the real question is not what to call the system of economics that we live with, it is figuring out if it really expresses our values.

I value respect, responsibility, and resourcefulness. Therefore, I want every one to have ample opportunity to put a company together because they have the gumption and enterprise to provide goods and services to others. In a system of free enterprise, where this is true because the barriers to entering into business are very low, anyone can start a company by appealing to their friends, neighbors, and their entire social network for the support they need, financial and otherwise. When the system respects the initiative of individuals, the individuals are supported with a clear set of legal requirements for being responsible about doing their business, and the individuals can be creative and resourceful about how they accomplish their business objectives, then I support that system no matter what you call it (I thought it was capitalism, but perhaps I am mistaken.)

On the other hand my values are not expressed by a system that supports the cheap labor trap of slave wages that disrespects workers. My values are not expressed when multinational interests act irresponsibly by devastating ecologies and cultures. My values are not expressed by a system that uses violence and threats of violence to secure the interests of the global rich and powerful over the interests of the local and sustainable.

White’s article seems to me an exploration of a certain set of values. I found that his emphasis on “capitalism” exemplified by Weyerhauser, Monsanto, and “corporate evildoers” did not expose any useful guidance for expressing the set of values he was exploring. I get that he values work that does no harm, deepens the worker, encourages creativity, takes the collective risk for success as life, and makes good & beautiful things, but how do we recognize the forms of organization or a set of regulations on organizations that help or hinder those values?

(end of second post)

(The third post is a response to the following posted by jon b. on Jun 10, 2007 #65:)

“I wouldn’t say leaving capitalism behind is the goal, but rather to change it, morph it, improve it into something else.

I’ve felt for awhile that capitalism and democracy are almost oppositional. …”

jon b,

As I understand capitalism, as distinguished from global corporatism, it is the structuring of the economy to allow anyone to acquire capital resources from anyone else within the limitations set by the SEC. This is an economic idea that is distinguished from the systems of other places where there are many more numerous restrictions on who can acquire access to capital resource and from whom.

Global corporatism, on the other hand is the pernicious spread of unaccountable corporate power over the earth. Global corporatism is a governance problem, not an economic one.

Thus I am under the impression that capitalism is a more democratic form of economic organization, but it has been severely corrupted and distorted by the rise of unaccountable private corporate entities that have transcended traditional accountable forms of governance.

I suspect that what White is trying to say is that work in it’s highest form is a soul enriching activity, but when it is stripped of the meaningful connections to high purpose, intimate community, and serving real needs it is a soul sucking waste of time. The problem is the lack of control of your own destiny, a personal governance issue. The problems of global corporatism and the meaninglessness of work are governance issues about accountability at the large scale and empowerment at the small scale.

Based on my understanding I believe capitalism is a good thing but global corporations frequently misuse capitalism to abuse and degrade people and our earthly home.

If you disgree with my understanding and insist on demonizing capitalism, would you please define what, specifically, you are against?

(Jon b gave a lengthy response (#70 on jun 13th) but the part that I mostly responded to was the following:)

“Capitalism in America of today favors the rich and statistically has been enriching that small portion of the population like never before. A democratic economic system would give everyone an equal chance as a democratic political system gives everyone one vote. Capitalism can’t do that, the objective is to beat everyone else and not care about the beaten.

Capitalism COULD get better. There are plenty of ideas and laws and regulations and ways to nudge it into a more equal system. At different times in our nations history capitalism has been better. I’d start with a new court challenge to the concept that a corporation deserves the standing of personhood. I’d also make anti-trust more strict, for instance a company couldn’t have more than 20% of any industry and that may be high.”

(The following is the one that I was not “authorized” to post, but finally succeeded in posting on June 28th.)

Thank you jon b for your thoughtful reply.

I don’t know where an economic system leaves off and a political system starts, it seems to me they are so intimately intertwined that it is not a practical distinction most of the time. I still can’t tell what most people mean by the term “capitalism” except as a generic term for either good things or bad things depending on their political affiliations.

But, let’s see if I understand your broader points correctly: You believe that a more democratic economic system that allows everyone an equal chance at participation in economic activities is a good thing. But, if the economic system is regulated as a purely competitive set of relations that actively excludes cooperative or altruistic behavior then it is bad. Perhaps you even believe that the well-being of real people (and the eco-systems they depend upon?) is of paramount concern therefore organizations should not be given equal status as persons because that status allows them to exert unfair influence over individuals and disadvantaged groups. If that is the case then we agree on the important stuff.

I believe that every real person who has the guts to start a business should be able to do so with a minimum of interference from the government. Our current system of state registration of businesses is, I believe, a highly effective system for facilitating that process with a minimum of hassle and expense. There are several options of organizational forms with different levels of reporting requirements which provides flexibility to meet different kinds of needs. The system also takes a largely hands-off role in overseeing the raising of capital for businesses, since complaints have to be filed before capital raising activities will be scrutinized. At small scales of business the current system is excellent as demonstrated by the facts about small business that I quoted before.

On the other hand I believe that the government has a responsibility to ensure that the conduct of business, especially by large corporations (regardless of whether they are held publicly or privately), is done in ways that preserve the purity, strength, and resilience of our earthly life support systems. The current situation of global corporate powers that act without any meaningful input from the people whose fates they are determining is wrong. It does not matter whether those decisions are made by an “economic” organization, a “political” organization, or any other kind of organization, the people who have a stake in the outcome of the decision have a right to participate in the decision making process. Until all organizations actually take their stakeholders rights to self-determination seriously, then we will continue to have injustice and corporate abuses of economic and political power in the world.

So, if we actually agree on the most important points about how the system is supposed to work, then the question is whether we can make a meaningful distinction between the generally good participation that occurs at small scales in business and the abusive participation that happens at large scales in business. The problem is shifting the behavior of organizations that are so large in terms of the extensive financial and informational resources that they wield them without any reasonable checks and balances against abuses against people, less powerful groups, and the environment.

P.S. If you would like to support entrepreneurs in the third world to participate economically I recommend Kiva.org where you can loan $25 or more to individual business owners. I loaned money to a 19-year old in Azerbajian who is a refugee but has been in business for 2 years and is now expanding his business for the second time. Wouldn’t you like to be your own World Bank and set international aid policy independent of the government?

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