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When is capitalism not capitalism?

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As used by right-wing apologists for “free market capitalism” (an oxymoron if ever there was one), capitalism is the source of everything good in the world — but also something that never existed. And it switches repeatedly back and forth from one to the other, every couple of sentences, in the same argument. I learned this from interacting with the right-libertarians who’ve been using the “anticapitalists with iPhones LOL” meme to troll the #ResistCapitalism hashtag on social media.

I stated (I can’t claim originality — I think maybe the original was David Graeber?) that “Capitalism didn’t make your iPhone. Workers did. Capitalism just determines how the rents are distributed.” In response, someone said “Capitalism created the freedom that allowed people to invent the iPhone.” I pointed out to them all the ways that Apple’s profits from the iPhone depend on the use of the state to restrict freedom, both directly by using “intellectual property” to impede free cooperation and replication of technology outside their corporate framework, and indirectly through state subsidies to the offshoring of production to countries where workers are easier to exploit. The would-be defender of capitalism immediately piped up “What do subsidies have to do with capitalism? That sounds more like government to me.”

Aha. So the iPhone demonstrates the wonders and productivity of “free market capitalism,” but all the state-enforced monopolies, subsidies and other government intervention that Apple’s actual profit model depends on are “government.” Gotcha.

Sorry, but you can’t have it both ways. You can use “capitalism” as the name either for an idealized free market system that has never existed in practice, or for the actually existing historical system that you’re an apologist for. You can’t do both. If you start with the corporate capitalism that Apple is part of, and then take away the historical legacy (and ongoing process!) of peasant land enclosure, colonialism and neo-colonialism, slavery, land and resource grabs, “intellectual property” and other monopolies, and restrictions on the free movement and association of labor… well, you don’t have much left.

If you want to argue that “real capitalism has never existed,” and repeat “That’s not capitalism, that’s corporatism!” like a broken record, fine. But you can’t turn around then and use the products of a transnational corporation like Apple as an example of capitalism. If you do, you’re either stupid or a liar. It’s that simple.

And when you get right down to it, “capitalism” is a really bad term for a free market system. The word originated in the early 19th century as a name for the real-world historical system of capitalism, that emerged from the late Medieval economy from about 1500 or so on. And the state was absolutely integral to the emergence of that system of political economy, and to the form it took. It was a system in which the state actively intervened in the market, in all the ways (and more) I listed two paragraphs above, and did so on behalf of capitalists.

The use of “capitalism” by self-styled “free market” advocates only came later. It was a word that already had a long history — a history, in Marx’s words, written in letters of blood and fire — and was clearly identified with specific class interests. So when Mises and Rand chose that word, a word with those bloody associations and class identifications as their name for the “free market” — and named their ideal system after capital, one particular factor of production, at that! — you damn well better believe they had an agenda, and knew exactly what they were doing.

Corporate capitalism is not the free market, no more than was Soviet state communism. Both capitalism and state communism are coercive systems of power that parasitize on the creativity and cooperative labor of freely interacting human beings, so that those in power — whether CEOs and coupon-clippers or commissars — can live off the products of ordinary people’s efforts and ingenuity.

  • Bill Marshall

    What an idiotic diatribe. I will happily explain free market capitalism for you. A free market is one where everyone has the ability to parley their labor ideas and capitol into profits within the framework of a marketplace determined by the voters, which include the poorest of the poor. So if the poor don’t like Apple outsourcing than they can get off their backside and vote to change the laws. They don’t so we have what we have. As long as you and me and Apple live by the same rules it is free. If politicians are bought by Apple than the majority of the voters can fix that but they don’t. this is why it is corrupt. We gave the smallest person the same vote as the richest person and the small don’t use the power and ultimate influence they have and that is their own fault. The point of capitalism being good is this. when a man can realize the possibility of making a million dollars instead of toiling away he uses his brain to come up with a better mousetrap and partners with someone with a little money saved and we get two rich people who spend their money on other peoples ideas like iphones and big screens and the rising tide floats all boats. There is no place in America today that is worse off than 100 years ago and the easiest example is medicines and vaccines as they would not have been invented if not for capitalism. Capitalism is not a problem, a giant government gaming the system with the full permission of the poor who don’t vote is.

  • Bill Marshall

    This 50 year old cartoon blows this article out of the water…