Tuesday, 19 July 2016

Definition of Capitalism

Capitalism is
"a system of economics in which production is based on profit for those who control the capital." - Carroll Quigley
As Quigley notes, those who control the capital aren't necessarily the owners since in large scale enterprise with widely dispersed stock ownership management is more important than ownership. Accordingly, profits are not the same as dividends and, in fact, dividends become objectionable to management, since they take profits out of their control. 

In addition capitalism per se does not equate with free markets. You can have free market capitalism but you can also have dictatorial capitalism as occurred under the Nazi regime in Germany. Strict free markets may indeed foster prosperity and political freedom but in practice the term 'free market' is lip service paid to what is in fact a rigged, controlled and crony-ist control of wealth and production in a few hands, with heavy governmental input in bed with established profit-driven corporate entities. 

Selling State owned assets to private hands, often at a loss to the taxpayer, is part and parcel of dictatorial capitalism since it is a practice that assumes governmental impetus and governmental oversight. Hitler engaged in this practice - as well as the destruction of labour rights and the labour movement - which puts paid to the notion that he was a socialist completely at odds with the policies of, say, a Margaret Thatcher. 


Although the ugly concept of 'economics' comes from the Greek root for household, οἶκος, an origin which makes me think that the 'science' of economics is at bottom one of household management, of its incomes and outgoings, of its production and consumption, particular to our era of radical technological domestication, the ancient Greeks themselves had no use for a science of economics, and I think they were better for it. 

True enough Xenophon did publish a treatise, known as Oeconomicus, on household management and agriculture as did the Roman Cato the Elder who was very explicit as how to best exploit the labour of one's slaves. But mainstream economic theory, which does not question the creation of money as a debt through centralised banking procedures in league with governmental say so, and prostitutes itself to political agendas of mass control and enslavement, is, simply put, a very bad joke.