CAPITALISM AND THE MARKET

I would probably never have written this entry had I not been stunned by how many Americans with whom I had conversations on this subject are convinced that markets are an invention of capitalism, which none of the non-capitalist societies have apparently been blessed with. (I am not joking! Here is the neat association game for the intentionally confused: capitalism=stock market=market!) Hence, this short FYI for those who persist in such a delusion.

Much of the support capitalism is getting from the non-capitalist layers of the population is due to the latter being sorely confused about the relationship between capitalism and the market. First of all, let us spell out that we are not talking about the stock market, but about the bazaar, where goods are sold. Once we use the simpler word “trade” here, rather than the apparently misleading word “market,” the fog of the confusion is likely to be dispelled. But let us not give up on the word “market” so easily, getting rid of it by substitution. The market is a natural and useful social invention existing since the dawn of history. Readers of the New Testament remember that the great Jewish Temple, the centerpiece of Torah Judaism, had been used as an expedient marketplace, thus predictably provoking the wrath of Jesus, but calling this “capitalism” will be a very imprecise figure of speech. In other words, the “market” ought not to be identified with capitalism as a technical term, which is ages younger than the market. Yet this is exactly the mistake that is constantly being made, largely as a result of the massive brainwashing by the apologists of financial capitalism, who use the obvious indispensability of the market to social functioning, to justify their social power and to promote their ideology of pure greed as the indisputable prime mover of social progress and also as a natural expression of personal freedom and ingenuity, thus implying that the one is virtually impossible without the other.

Yes, the market is a natural and integral part of any social organization, past, present, or future. It used to be flourishing throughout the Soviet experience. It even survived under the extraordinary wartime conditions! Long before any elements of capitalism, as properly defined, were present in Tsarist Russia, market activity and private enterprise going along with it, had been encouraged among the Russian serfs by their owners, allowing the most enterprising of them to buy themselves out of serfdom into freedom.

The advent of Weberian capitalism (my entry Weber’s Protestant Ethic And The Spirit Of Capitalism will be posted soon) saw many new social problems created as a result of poor regulation or none at all. But at least it was creating value at an exponentially high rate, and this dramatic increase in national wealth constitutes a convincing upside to the otherwise troublesome phenomenon, and makes all contra arguments rather difficult to sustain. It is enough to say that old good capitalism did not collapse, as prophesied by Karl Marx, but very successfully adapted itself into an acceptable mix of free enterprise and government regulation, that is, into an excellent mix of capitalism and socialism.

Indeed, who can argue against such a dramatic increase of national wealth, which socialism alone can never deliver. Had I been living in those times, I would never have been an adamant detractor of such capitalism, except to encourage its further adaptation into the most inoffensive form possible. But the problem today is that modern capitalism is profit-oriented, rather than product-oriented, to the extent that the product itself is no longer required. In fact, it has become expendable, and with it, the conventional market has also lost its appeal to today’s super-capitalist. Such non-productive capitalism is obviously devoid of any redeeming value, yet it dares to justify itself by the qualities which it no longer possesses. What it is delivering to the American people today is a deluge of cheap inferior products from abroad, and a staggering national debt which keeps growing literally beyond belief, and promises an economic Apocalypse in the nearing future.

What makes modern capitalism completely distinct from old capitalism and from the concepts of the goods market and of private enterprise, is its financial speculative manipulation, promoting the philosophy of non-productive greed and the cult of money-printing as an artificial inexhaustible source of solvency. As I have said before, I have no objection to the industrial, value-creating concept of capitalism, associated with promoting private enterprise of industrious and creative men and women. But history has shown us that capitalism left to its own devices without strict government regulation, loses all interest in the welfare of society, and is most likely to degenerate into the monster, whose uninhibited voracity, having devoured its patsy victims, eventually turns on itself, leaving nothing of value in the wake of its reckless rampage.