You can have money or some functional equivalent without capitalism. I repeat, again: For purposes of this thread I’m defining capitalism as “capital is owned by party X, and party X pays wages to parties A, B and C to operate said capital.”
But if it’s a collective decision made from below, how is not a free market?
Yes, that is exactly what it makes them, for the definition of “capitalist” I’m using here; see above post.
Suppose there are two shoe factories. One in Barcelona and one in Seville.
Who sets the price for shoes? Do the workers at each factory set their own product’s price? Are the Barcelona shoemakers free to discount their price in order to outsell the Seville shoemakers? Or is the price of shoes set by some other entity?
Who sets the wages for shoemakers? Do the shoemakers decide how much money they get to take out of sales? Are the Seville shoemakers free to give themselves more money than the Barcelona shoemakers? Or are their wages set by some outside entity?
If the shoemakers in the Barcelona factory and the shoemakers in the Seville facotry are free to compete against each other in setting their own wages and prices (and making all the other decisions involved in running the factories) then how is this not a capitalist economy?
This seems like a silly definition that has nothing to actually do with capitalism. If I decide to open up my own business and I work in it myself, am I somehow not a capitalist? I invested my money and I’m trying to make a profit just like any other business owner - how am I different from them?
The idea of it only being capitalism if there’s an owner and he has employees seems like an example of the arbitrary and meaningless distinction I mentioned.
I assume that those of you who think that investors and owners should be liable for the actions of their employees are coming at this from a pro-worker and anti-capitalist position? At least as capitalism exists today?
If so, then you need to think through the consequences of what you’re suggesting.
Let’s say that I hire a truck driver, and tell him to deliver something. Along the way, he stops for a drink, then gets back in his truck and kills someone. He’s sued for a million dollars, but since he doesn’t have any money, the corporation gets sued. And in turn, my personal assets are put in play because we’ve decided that I have to take personal liability for every decision my company makes and the actions of its employees.
Now, think about what that would do to employment. I’ve got all the capital, and I need workers. But if each worker can put all my assets at risk, I’m going to be much pickier about who I hire. Maybe I won’t hire anyone at all. Or maybe I’ll only deal with people who have their own skin in the game (i.e. other people with capital) so we share the burden of liability. And it’s damned sure that I’m not going to hire anyone with an unproven track record, or a criminal record, or a bad driving record.
The ability to finance a corporation without being personally liable acts as a shield between investors and all employees - including the lowest level. Take that away, and just who do you think is going to be frozen out of the capitalist system? The people without capital. The people from the lowest rungs of society who are the worst risks. Young people without a proven work record.
You can see a similar dynamic in France. To ‘protect the worker’, France has put very onerous conditions on employers. It’s extremely hard to fire someone once you’ve hired them, which means the owners of a business take on a significant liability when they hire someone. Their risk goes way up, because if the person turns out to be a lemon it’s very hard and expensive to undo the hiring.
So what’s the result? Are workers happier? Well, older workers with established work records, wealthy workers from good families, and other people who are already doing well may benefit to some degree.
But immigrants? Young people? People with poor track records or who can’t get good references? They’re screwed. No one wants to take a chance hiring them. France has one of the highest unemployment rates for young people in the developed world - over 20%. In the U.S., at an equivalent overall unemployment rate of 7.8% (this was in early 2009), young people between 15 and 24 only had an 11% unemployment rate.
Anything that adds to an employer’s risk when hiring will depress employment.
In addition, if putting my investment capital into a company exposes me to the company’s liability over and above my investment, I’m going to place a much higher risk premium on my investment. That means the company had to provide significantly higher return on my investment, or I won’t invest. So you’d see investment in new startups and entrepreneurial companies decline, which would hurt economic growth. You’d give the largest companies with the deepest pockets a big advantage because they could cover their own liability without it being dumped on the shareholders.
Probably another unintended consequence would be an increase in tort claims. If companies are no longer shielding investors from liability, then every company’s pockets get a little deeper, making it more lucrative to sue them.
I’m sure there are plenty of other negative effects. And this is the thing I keep emphasizing about the difference between how the left and right approach matters of regulation and central control. People on the left tend to discount the unintended consequences of regulation and instead focus on issues of fairness. Capitalists tend to look at all consequences of regulation, and not just the consequences for the select group of people you’re trying to ‘help’.
This gets us back to why leftists like Chavez keep falling back on price controls, nationalization of industry and other interventions in the market despite their dismal track record. They seem to think simplistically: “Prices are too high for the poor to afford. We’ll pass a law and put a cap on prices!” They don’t seem to be able or willing to think about the secondary and tertiary effects of doing that. Or maybe they recognize that there might be shortages as a result, but they are arrrogant enough to think that when the time comes they’ll just solve that problem with more intervention. Just because it failed every other time it was tried doesn’t mean it will fail this time - they’ve learned the mistakes of the past, and are smarter than the last guys who tried it. This time, the socialist revolution will succeed!
By pooling their resources, by calling in favours, by pre-selling their mineral revenues. Might as well ask where the mining equipment factory gets its money, and so on down the line.
How is that necessarily capitalism, though? Replace “farmer brown” with “the Braun kibbutz” and the market stays the same, but private ownership of the means of production is gone.
Brain’s covered this, but no, that is exactly what makes them non-capitalist.
Because the only owners are those involved in the production themselves (and, conversely, everyone involved is an owner). There are no people there just to provide money/equipment/factory space and not do the work, i.e. no Capitalists. No Capitalists, no capitalism.
You’re doing the work? Business owner =/= Capitalist.
It’s not arbitrary, it’s pretty fundamental to the definition of Capitalism.
Definitely
This isn’t the same as the case previously discussed - at least, I assumed the pollution mentioned was as a result of the business-related activities of the executives that the stockholders had a hand in hiring. Of course the corporation shouldn’t be civilly liable for every criminal act committed by its employees. Only those that come about as a result of its own business activities, those things that owners actually have a hand in, or should.
I think this is a case where variant tort cultures come into play. Not everywhere in the world would you even be able to try and sue the company in a case like that.
And that hydraulic despotism is why capitalism is evil.
…and you’re going by the assumption that it’s right and proper that the capitalist should be able to exercise such liability-limiting options to protect “their” assets. There’s the fundamental left-right disconnect.
Not exactly. I think we’re each having an issue with the excluded middle.
Take your truck driver example. If you employ a truck driver with a history of irresponsibility because he’s willing to work for less, and he causes an accident, of course you should be liable to some degree. Especially so if it turns out you didn’t even check he had a license, or something like that. OTOH if you exercised due dilligence and your trucker was clean as far as anyone could reasonably tell, then the suit against you should fail.
I’m not as extreme as Mr Dibble - I think there are practical limits to what can be expected of an investor or part owner in terms of liability. E.g. say four guys share ownership of a jeep for off-roading at the weekend and they all use it regularly, then they ALL share liability for keeping it in safe running order. Any or all of them should notice if the tyres are bald or the lights don’t work or it’s due for a service. But if three of them use it regularly and one uses it every New Year’s Eve, then the low-oversight partner is arguably less liable than the others about the state of the vehicle in the middle of the year.
Sorry, Dibble, but I pretty much disagree with everything you wrote.
It doesn’t matter if a business is owned by a single individual who works in it, a single individual who doesn’t work in it, a collective of all of its workers, a partnership of owners, or a group of corporate investors. All of these are private ownership. The ownership of the business is clearly distinct from the wider community.
As far as that wider community is concerned there is no difference between Bill Gates and the Braun kibbutz. Both are independent entities that invested their assets into a business and are managing it in their own self-interest.
Sure, and? You’re trying to conflate “private ownership” with “capitalism”, but that’s not right. As long as the “private owners” are *also *“the workers” (all of them) you don’t have capitalism.
Non-capitalist =/= communist or socialist. There are many strains of anarchism that don’t require communal ownership of the means of production, from syndicalist models and mutualist ones on down.
Only in as much as the “wider community” doesn’t care about where it gets its eggs from i.e. to what extent the community accepts (IMO) unethical behaviour like wage slavery. I currently buy produce from a farmer’s collective for the same reason I buy free range, because I consider it more ethical. So, as a member of that “wider community”, I would (and do) care, which negates your point.
WTF?! I think you’ll find it makes a lot of difference – to everyone who is employed by or involved in that business. And even, to some extent, to every one who has to deal with that business.
And I think you’ll find it makes a difference to the wider community, too. It’s hard to imagine a worker-owned oil company, with broad shopfloor participation in decisionmaking, making the kind of decisions that led to the BP oil spill – and got several BP workers killed.
As I’ve said, I disagree. There’s a family farm stand across the street from me. Are you claiming it’s not a capitalist enterprise?
Why? I find it quite easy to imagine. The owners of an oil company, be they John D. Rockefeller, an anonymous group of stockholders, or a collective of the employees, are all going to have the same interest in the profits of the company. All of them will personally gain by lowering costs on safety procedures. If you feel that a workers collective is somehow more noble and enlightened than a board of directors and will voluntarily sacrifice their own self-interest for the sake of the world community, than you’re being utopian.
sigh No, it isn’t, not in the sense we are using the term “capitalist” in this thread, which was clearly stated in the OP and has been restated repeatedly since. Stalinist Communists might object to the existence of a family farm stand, but no school of anarchist would.
Look at it this way: A workers’ collective or soviet is as if a labor union local, instead of demanding concessions from management, demanded to be management and made it stick. Whether that is a good thing or a bad thing, it only has relevance in situations where a labor/management division is possible in the first place.
But – and here’s the key point – family farm stands represent the kind and scale of business which has been increasingly marginal and economically unimportant ever since the Industrial Revolution and will remain marginal in any conceivable form of industrial economy. Family farm stands simply are not what Marxist or socialist or anarchist thinking on the subject is about.
There is contrary thinking, to be sure – see distributism, which envisions a society of family-scale farms and businesses and cottage industries, with most families or individuals owning their own productive property in a small amount, and nobody owning enough to employ large numbers of non-owners. Distributism is an early 20th Century effort to conceive of an alternative to both capitalism and socialism; it was mainly the work of Roman Catholic intellectuals, but you could make a case that kind of thinking goes back to Thomas Jefferson. The utopia described in Kim Stanley Robinson’s Pacific Edge (see post #6 above) is really more distributist than socialist – the state intervenes in the economy mainly to preserve the distributist arrangement. The result is a free-market system that is only marginally capitalist.
I understand that.
There’s a story about Abraham Lincoln. Once some other politicians wanted to do something and to disguise what they were doing had come up with some euphemist name. Lincoln said, “Here’s a riddle for you gentlemen. How many legs does a donkey have if you call its tail a leg?”
One of his guests answered, “Well if you call its tail a leg, then I guess a donkey has five legs.”
Lincoln responded, “No, a donkey has four legs. You can call a tail anything you want but that doesn’t make it a leg.”
And Marxists can claim that capitalist businesses aren’t really capitalist if they’re owned by the workers. But all that does is demonstrate that Marxism is a poorly conceived philosophy.
Sure, by a definition he himself invented.
If BrainGlutton wants to invent definitions and then argue that a rose is not a rose because he calls it a pig, there’s not much you can say in opposition to that. You’re left arguing over how many angels can dance on the head of a pin.
If you can’t make the argument that a collectively owned business is inherently a capitalist enterprise and will evolve accordingly, changing the nature of the relationship between owners and workers - and this, to be honest, is the answer to Sam’s rhetorical question as to why collectives haven’t taken over market economies - then this argument can’t proceed beyond agreeing with what BrainGlutton wants to define truth to be.
:rolleyes: I did not invent it; it is a definition that has been in wide currency in economic and political theory for almost two centuries now. Did you even read the OP?
:rolleyes: Look, there’s a real and important difference between a business that is owned by the workers and one that isn’t, and “capitalist” is as good a name for the difference as any other; and I’m fairly certain the word’s use in that sense actually predates the word’s use in any other sense.
Little Nemo, what does “capital” mean?