Something Wrong with Capitalism
There's nothing wrong with capitalism. So sang Danny Elfman with his band Oingo Boingo in 1981. But what does that actually mean? What is capitalism? People the world over decry the system or sing its praises based on entirely different interpretations of the word. During the Cold War, there was a lot of skepticism about capitalism. People feared that it might not be sustainable and communism was seen as a viable alternative—indeed, perhaps the essential alternative. Then the Berlin Wall was torn down, eventually bringing with it the rest of the Iron Curtain. With new details brought to light, people in most of the developed world were finally able to see the fatal flaws in the Soviet system and how truly terrible life was for the nation's citizens. The fall of the Soviet Union was taken as proof of the superiority of capitalism and the American way of life (often times with no delineation made between the two). However, the recent global recession, spurred by the financial crisis that began in 2007, has once again brought capitalism into question. Or has it? There is a disconnect today in how capitalism is described and what capitalism is used to describe. When people talk about the failure of capitalism or the failure of our current economic system in the United States, what do they really mean? Are the two the same thing? In short: no. The fact is that the United States has an interventionist economy, one in which the government regulates certain industries and intervenes where and when it considers such intervention necessary. Today capitalism is commonly understood to mean precisely a "free market" and through the history of the term, its evolution, and modern day usage in the media, it can be shown that the United States does not operate under capitalism.
The earliest known usage of the term "capitalist" is from The Hollandische Mercurius, which "uses it once in 1633, and again in 1654" to refer to owners of capital—i.e. men of wealth (Braudel 234). The word capitalism evolved from this definition and the first usage of the word can be found in Encyclopédie to mean "the state of one who is rich" (Braudel 237). In fact, the Oxford English Dictionary only has three simple definitions listed for the word. The entry reads: "The condition of possessing capital; the position of a capitalist; a system which favours the existence of capitalists" ("capitalism," Oxford English Dictionary). The word started out with a very unambiguous usage. Capitalism means owning capital. It makes perfect sense. If we take a look at the Merriam-Webster Dictionary, however, we get a different story. They tell us capitalism is "an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market" ("capitalism," Merriam-Webster Online Dictionary). Now the definition looks more familiar. The Merriam-Webster Dictionary is, after all, known for being the go-to source for American English. Thus, in an American context, capitalism relies on "a free market." How did the term go from such an elementary meaning to one so hotly contested? As it turns out, the roots of the modern understanding of capitalism can be traced back to the system's arch-nemesis himself, Karl Marx.
Karl Marx and Friedrich Engels's Das Kapital discusses in great length the "capitalistic system" and the "capitalist mode of production" (Marx and Engels). The system explained is complex but ownership of private property remains key. Marx explains that "...the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which the money starts and to which it returns" (Marx and Engels 170). Marx doesn't exempt any and all functions of the state. Even with the state providing certain securities, Marx still considered capitalism to exist. "In the manufacturing period par excellence," Marx writes, "the capitalist mode of production had become sufficiently strong to render legal regulation of wages as impractical as it was unnecessary..." (Marx and Engels 811). Here Marx is describing a 16th century system that is foreign to most people today and hardly what people would associate with American capitalism. Even though the state intervenes with wage controls, Marx still considers terms the economic activity as "the capitalist mode of production." This is because to Marx, capitalism was simply the fact that private capital was being used to produce goods. Not even Adam Smith, the man championed by self-proclaimed capitalists the world over, envisioned an economy sans governmental function. Smith left room for things like public education, a standing army, and a judicial system (one "united to the executive power") as roles for government (Smith). However, Smith promoted ideas most closely associated with capitalism such as free trade and the "invisible hand" of self-interest in the free market. Those are the ideas that live on in the interpretation of American capitalism. The idea of the proverbial invisible hand endures but there's no question as to how government intervention might affect the outcome of market forces.
This focus on private enterprise and the free market being the staples of capitalism would have an effect in how capitalism is referred to today. Noam Chomsky is widely considered one of the top intellectuals in the United States. In September of 1999, Chomsky said this of capitalism in a lecture at Kansas State University: "I should say that when people talk about capitalism it's a bit of a joke. There's no such thing. No country, no business class, has ever been willing to subject itself to the free market, free market discipline. Free markets are for others" (Chomsky). Chomsky is no capitalist. He is known mostly for his vehemently anti-capitalist ideas and yet he understands what constitutes capitalism. It is the unbridled market. At least, that is the common understanding. Robert Murphy is another intellectual who tackles the topic of capitalism. Unlike Chomsky, Murphy is a libertarian and a big proponent of the free market. In a book he wrote defending capitalism, Murphy explains, "Capitalism is the system in which people are free to use their private property without outside interference. That's why it's also known as the free enterprise (or free market) system, because it allows people freedom to choose..." (Murphy). Murphy's understanding of capitalism is the same as Chomsky's even though the two are approaching the topic from completely different philosophical points of view. It is this sort of language and this definition that informs most Americans on what they know about capitalism because this is exactly how it is portrayed in the media.
Last year Michael Moore, an Academy Award-winning director, released a documentary titled Capitalism: A Love Story. The film takes a long, negative look at Capitalism, blaming its free market policies for so many ills in the world. During an interview to promote the film with Larry King on CNN, Michael Moore said, "Capitalism, in the last year, has proven that it's failed. All the basic tenets of what we've talked about the free market, about free enterprise and competition just completely fell apart" ("Michael Moore..."). As an acclaimed director, Michael Moore is an authoritative figure in mainstream media. He's not the only one who has decried free market capitalism since the financial crisis of 2007-08. People all across the media have described capitalism in similar ways. In November of 2009 a journalist for CBS News wrote, "Capitalism itself failed a little more than a year ago. Or rather the bizarrely rigged corporate-run market economies that determine at least some portion of nearly everyone's life on Earth imploded in a frenzy of deregulated fecklessness and weirdly disassociative procedures" (Solnit). The idea that the market is completely "corporate-run" and "deregulated" sticks in the readers' minds even though it is not an entirely accurate description of how the system operated in reality. Over a year earlier, an op-ed writer for The Washington Post defended capitalism by claiming, "We are not witnessing a crisis of the free market but a crisis of distorted markets" ("Is Capitalism Dead?"). The author clearly marks a difference here between the "free market" of capitalism, the topic of the article, and the "distorted markets" that currently exist in the United States. CNN gave an even more recent example of how capitalism is viewed in this country. In the online article, the author explains a recent kerfuffle about the content of the next generation of public school textbooks in Texas. There has been a lot of disagreement and a lot of criticism coming from and going towards conservatives who want to change a great deal of content. According to the article, these activists "[insist] that, for example, textbooks stress the superiority of American 'free enterprise'-- they think the word 'capitalism' is too negative." This signifies that conservatives, largely seen as proponents of "capitalism" in America, connect the concept with "free enterprise" (Czitrom). An argument can be made as to what the activists really meant but "free" inevitably implies no intervention, the opposite of the economic system in place in the U.S. right now. As evidenced, this is precisely the kind of language that dominates explanations of capitalism in the media. The CNN article also illustrates the point that Americans seem to associate this idea of capitalism with their country. The media, and thus the rest of American society, have taken hold of the idea that capitalism is synonymous with the free market. Alas, markets in America are far from free. Whether good or bad, this system should not be referred to not as capitalism but by its more accurate description: interventionism.
The term capitalism clearly has a complex history. It started out with a simple, clearcut meaning: the owning of capital. Today the word represents an economic system that people automatically associate with a negative or positive connotation. Either way, these feelings stem from the meaning the word has taken on in the United States: free markets. Many still refer to modern economies like those of the United States, Great Britain, and other industrialized nations as capitalist. It is clear that the definitions by example don't quite fit the operational and formal definitions used throughout the media. It is the latter definitions that form the basis of the word in people's minds. For this reason, when there is talk of capitalism, the most immediate thought is that of an unregulated and untampered-with market. This idea remains even as it is put it into context of a modern economy in a developed country. Without thinking, laissez faire capitalism is frequently associated with the United States. As Noam Chomsky said, though, "there's no such thing." Not today, at least. For now, neither the United States nor any other country in the world can truly claim to be a capitalist nation.
Works Cited
Braudel, Fernand. The Wheels of Commerce, Vol. 2, Civilization & Capitalism 15th-18th Century. Los Angeles: University of California Press, 1982. Print.
"capitalism." The Oxford English Dictionary. 2nd ed. CD-ROM. Oxford: Oxford University Press, 2009.
"capitalism." Merriam-Webster Online Dictionary. 2010. Merriam-Webster Online. 17 March 2010 <http://www.merriam-webster.com/dictionary/capitalism>.
Chomsky, Noam. "Sovereignty and World Order." Kansas State University. 2006. Web. 20 March 2010.
Czitrom, Daniel. "Texas school board whitewashes history." CNN 22 March 2010. Web. 31 March 2010.
"Is Capitalism Dead?" The Washington Post 20 October 2008. Web. 20 March 2010.
Marx, Karl, and Friedrich Engels. Capital: a Critique of Political Economy. Trans. Samuel Moore and Edward Aveling. New York: Random House, Inc., 1906. Print.
"Michael Moore: Capitalism has proven it's failed." CNN 24 September 2009. Web. 17 March 2010.
Murphy, Robert P. The Politically Incorrect Guide to Capitalism. Washington, DC: Regnery Publishing, Inc., 2007. E-book.
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Mississippi: Project Gutenberg, 2009. Project Gutenberg. Web. 20 March 2010.
Solnit, Rebecca. "How Capitalism Failed Us." CBS News 25 November 2009. Web. 20 March 2010.
0 comments:
Post a Comment