With a sense of moral smugness that imputes Karl Marx’s theory on the stages of history is finally being proven true, opinion from the self-appointed intelligentsia increasingly posits that capitalism has failed, or that America is moving towards a post-capitalist system.
Snide insinuations about the supremacy of leftist economic theories which turn the commodification of people into a simple matter of policy aside, their conclusion is, in part, correct. America is not capitalist. And it has not been so for a long time.
Consider the parlance of modern economic issues. It is all trade deals between nation-states and multinational corporations, tariffs as a means of price control and government regulation of benefits and wages offered by private companies.
None of these things has a whit to do with capital; they all revolve around power politics.
Yet all these actions are touted as the legitimate oversight function of an altruistic government concerned with creating and maintaining an egalitarian framework that prevents so-called crony capitalism, where the connected can take advantage of the disconnected.
The term crony capitalism, and the idea that government is preventing rather than aiding it, is absurd. Real capitalism precludes transactions based in anything other than mutual self-interest. Cronyism connotes something underhanded and dishonest. It connotes one party taking advantage of another through manipulation or force, which cultivates a culture of fear useful for any entity wishing to gain powers of oversight.
But true capitalism is not rooted in force and power differentials, as are government-endorsed trade deals and regulations. It is not a limitation on any individual’s productive capacity; it is an aid of it.
What the government is pleased to call crony capitalism and stand in firm moral opposition to is the promotion of deals between connected elites which disproportionately benefit one party over the other, usually as a result of some dishonesty built into the framework of the agreement.
This is not a degenerate form of capitalism, but a form of oligarchy. It creates a permanent upper- and under-class and frames issues and their effects in context of society at large. This is significant because it is a political, not an economic issue.
Politics deals with groups, not individuals. Capitalism is solely a system of individual interests and actions. It is not concerned with power equations, but the productive capacity of the individual. Capital, after all, is merely a form of property. Capitalistic transactions are entirely rooted in the individual’s capacity to take what he has and barter it for his betterment. The only power which enters into consideration is his own discretion. If he believes he can profit in some way, he approaches another party who either agrees to enter the deal because he sees some roughly commensurate benefit to himself or declines to participate. There is no coercion. The minute coercion enters, the transaction ceases to be about capital and becomes about power. Then it is no longer a matter of economics but of politics.
Capitalistic egalitarianism, then, is entirely self-generating; it is not something that can be created by drawing lines rooted on relativistic lines of political power. The government, by stepping in with an aim to create parity, has made exactly that impossible. Parity under capitalism is determined by those who enter deals for their own self-benefit. It is bottom-up. And all political power is top-down.
All the government has succeeded in doing is distorting the idea of capitalism, which now often is associated with the accumulation of “stuff.” But capitalism is primarily a philosophical system. By emphasizing the ability for an individual to use what he has to better himself, it is productive capacity which is emphasized. What exactly he produces is entirely ancillary.
Yet, it is intellectualism which has been most decimated by government intervention. There is no recognition that the most primeval and fundamental forms of property is that of the mind. Production of physical goods is predicated on the ability to think. But intellectual property rights have been particularly undermined by altruistic economic regulation. The intellectual capacity of the business owner to devise a product and successful business model is seen only through the lens of profit. But money is only a scale, and one heavily influenced by political interests, for measuring value. It can measure the worth of a good as determined by consumer willingness to purchase at a certain price, but it cannot possibly encapsulate the more esoteric value of the intellectual and productive capacities which contributed to its production. This value, the only value of real significance, has been rendered irrelevant.
Capitalism in the modern vernacular is about politics. Yet, even discussion of the economic principles which make up capitalism fails to properly describe its merits. Capitalism properly understood is the economic expression of a philosophical ideal. It allows, as no other system, for individual determinism and pursuance of self-betterment. Until recognition of this again becomes the focus of free market debate and advocacy, America cannot be said to be a truly capitalist nation.
Also published on Medium.