> Someone has to pay for the fixed costs. And its most common that an investor does that.
Yes, and, again, equity isn't the only form of investment even within the capitalist system (though, obviously, it's often structurally preferred by investors within that system.) So, even granting, for the sake of argument, the need for capital investment to start firms, that does not imply a need for capital, as opposed to labor, ownership of firms. (See, for a large example even embedded within a capitalist economy, the Mondragon Corporation.)
> Property rights are just an extension to help the underlying basics
That's certainly one of the reasons for formalizing such rights, but “property rights” aren't a special feature of capitalism, what defines capitalism—and this is generally true of each other politico-economic system—is a particular model of property rights. And, yes, in each case they are viewed by defenders of the system to “help” the immutable basic needs of human society.
> Equity isn't the only form of capital investment.
Someone has to pay for the fixed costs. And its most common that an investor does that. Never said it has to be that way, just that it is common and offers many advantages.
> Well, lots of ways, including the thing that actually defines capitalism, the particular model of property rights.
Property rights are just an extension to help the underlying basics I wrote about. If you are a tribe you might life in balance with other tribes and you have control over a river (or whatever) and you might even give something comparable to property right to a member of your tribe. But this is all enforced by society. Property rights are the same thing, just more formalized and generalized. Ofc. there is more insecurity in a autocracy, but that because an autocracy is about exploiting others.
>capitalism is a deal of state-based enforcement of your property rights so that you create value for society
No it isn't. Capitalism is a "system" of capital investment (usually with the expected gains of personal profitability), contingent upon the property rights of the ownership of capital and transferable (partial) ownership of an enterprise that consumes that capital.
Capitalism is contingent on property rights being recognized and defended against arbitrary taking, but property rights are not contingent upon the owner of property contributing to society in some arbitrarily (im?)measurable way.
This is not to state that the protection of property rights is not a net social boon, just that property rights do not evaporate (in whole or in part) in specific instances once someone calculates the "social value" for an owned enterprise has dropped below some immeasurable threshold.
Governments operating under a system of justice attempt to regulate the systems and boundaries of social exchange (to minimize and resolve apparent conflicts), but do not require any party to engage in such exchange to the benefit of anyone, or the mutual benefit of society.
> How can all companies be employee owned if you need to invest a lot of capital to start a car factory.
Equity isn't the only form of capital investment.
> How is capitalism different from early human tribes?
Well, lots of ways, including the thing that actually defines capitalism, the particular model of property rights.
> They also needed to work and trade.
Which is broadly true of every human society, regardless of politico-economic system; such systems differ in the (for instance) distribution of the accumulated benefits of trade, not in it's practical necessity.
> Things have become much more sophisticated but the basic principles remain.
The basic principles that remain the same are not the features that distinguish politico-economic systems from each other.
> People complain about spending too much time for a company and slaving away - but in earlier times they would have spend way more time on the fields plowing while 4 of their 8 kids died.
Yes, technology has improved since ancient times, and, in the domain of politico-economic systems even most critics of capitalism would agree that it represents positive progress from feudalism and other earlier politico-economic sysyems.
> The capitalist system doesn't preclude workers from acquiring capital or capitalist from working.
In the same sense that the US electoral system doesn’t preclude more than two viable parties. The system of property rights that defines capitalism doesn’t specify any limit, but the structure it creates promotes it in function.
> The conceptual systems introduced by Marx and others is that only workers can own capital
No, the conceptual system introduced by Marx rejects the concept of ownership as applied to capital [0], though it favors workers exercising control of the capital to which their labor is applied. Different variants derived from this and related ideas have different specific mechanism for this exercise of control.
[0] When Marxists talk about rejecting/abolishing “private property”, it refers to this, because in the Marxists terminology “private property” refers not to property of non-state individuals and entities in general as it does in current common use, but specifically to property rights in the means of production, i.e., capital.
> all settled agrarian societies need property rights
Perhaps, but the upthread discussion doesn’t hinge on merely the existence of property rights, but the very specific capitalist model of property rights, which obviously, not all settled agrarian societies have needed, since it is several millenia newer than settled agrarian societies are.
Defenders of capitalism love to argue about the need for “property rights” and then just leap from there to “and, therefore, capitalism”.
> A lot of the infrastructure of capitalism is oriented around generating and sustaining small- and medium-sized businesses
A lot of the infrastructure of modern mixed economies is dedicated to maintaining some space for such businesses against the natural forces of capitalism, as part of the broader purpose of modern mixed economies of providing sufficient mitigation of the clear adverse effects of capitalism to relieve pressure for more radical reform, sure.
That is not inconsistent with the fact that the basic nature of the capitalist property system is to promote the creation of productive monopolies from which monopoly rents can be extracted. Actually, that fact is why that effort is necessary.
> business owner may philosophically believe in capitalism, but that does not make them a capitalist in the active sense
You've defined capitalism circularly to your argument. A steady-stage investor, whether a sole proprietor or outside investor in a business throwing off healthy dividends, is by definition not a capitalist by your book. Fine. Let's abandon the word for now.
The broader system of private ownership--the one we have in America. That doesn't require growth at all costs. Neither do outside investors. There are entire categories of outside investors who specialize in zero-growth or negative-growth companies. We can call it capitalism, as most people do, or private property or peanut malanga, the system and its mechanisms remain the same.
Growth-oriented investors need growth. And if you've spent your life around leveraged folk and venture capitalists, it may seem that's most of the capital in the world. But it's not. They're called alternative assets for a reason. The main universe of assets broadly accepts–in fact seeks-preservation of real value plus income.
> The idea of property came into existence long before capitalism, which seems to be the linchpin of your take.
That is not what I understood. I understood a simplified definition of property under modern capitalism. Capitalist property value is overwhelmingly limited to physical utility and not to consequence of consumption. There are a few exceptions, in various countries and industry, notwithstanding.
I did not see a suggestion as to what to do about this.
>We have a capitalist economic system, and it works pretty well for us, but that doesn't mean anyone has an inherent natural right to their capital. When it comes down it, property rights are all fictitious and exist only because society says it does. It's hardly wrong for society to decide to recoup some of what it has created.
I fundamentally disagree with that point. Government exists to protect people and their property. People have a natural right to themselves and to an extent their property - rights do not come from society, rights are internal and society functions to abridge them where beneficial.
> capitalism isn’t some intentional decision that society somehow collectively makes,
Yes, it is. Historically, it is an intentional decision society collectively makes at the behest of and for the benefit of thr mercantile class.
> that arises in the presence of (1) property rights, and (2) freedom of association
Property rights are much older than capitalism, freedom of association as a widespread normn is newer and not super consistently found with capitalism. The particular structure of property rights that characterizes capitalism, which is very different from the system of property rights that characterized, say, feudalism, is not the same thing as “property rights” generally, though supporters of capitalism often confuse the two concepts.
>Plenty of capitalists are happy running businesses at steady state.
There are plenty of business owners who are happy to run at steady state---sole proprietors and family businesses, for example. These kinds of businesses can exist without capital per se, they can be financed with debt. But for businesses with investors, which is to say businesses backed by capital with the expectation that there will be a substantial return on the investment, growth is imperative.
So no, I don't believe there are plenty of capitalists happy to run a business at steady state, because one of the requirements of a capital investment is that the value of the investment grows, and the more rapidly, the better. A business owner may philosophically believe in capitalism, but that does not make them a capitalist in the active sense.
> However, so long as people are using land, buildings structures, designing equipment… the laws of capitalism will apply.
Capitalism is the system
where someone can claim ownership of land/buildings/ideas(typically due to prior ownership) aka "capital". If the laws don't allow someone to make and hold that claim of private ownership, how would the "laws of capitalism" still apply?
>One thing I haven't seen mentioned is the fact that markets are created, not discovered.
Probably because most capitalists don't believe this?
>nor did the property rights regarding their shares.
Debatable. Most capitalists would say that property rights naturally exist and that "shares" are simply an agreed upon way of dividing property rights over a complexity of assets and agreements (i.e. a business).
>Taxing large profits is no more "unnatural" than protecting the right to these profits in the first place.
True. Obviously a laissez-faire capitalists would say they're both unnatural- as they would say most, if not all, concepts created via legislative action are also "unnatural." Of course, people don't typically expend effort fighting "unnatural" injustice that benefits them- especially when money is on the line, and even more so state protected stock holder money.
>A business acting unethically but legally is most rectifiably a problem with the law,
Since when is it the legislature's job to enforce morality?
>But capital is dynamic and ever-changing. Also, a huge amount of it, quite possibly a majority in how you measure it, is in human skills and knowledge.
Again, this doesn't reflect the historicity of the ownership of capital. Today's equivalent to land monopoly would be intellectual property where individuals and firms have effectively monopolized lawful use of labor to produce a wide variety of products. This is especially disastrous when it comes to patents since there's no reasonable justification for such monopolization since it is by definition rent seeking. Therefore, I ask why do you feel it's logical to continue down the path of further monopolizations which inevitably harm the economy as a whole and individuals in their pursuit of material betterment?
>And the personal-property/capital distinction is flawed. Is a car personal property? Does it matter if I use it to commute to work, or to deliver pizzas? There's essentially no comprehensible criteria to distinguish personal property from capital property.
No it's not flawed because capital is the means of production itself. Your car isn't a means for production that can be naturally monopolized. But if you demanded a toll for a stretch of road that happens to be out front of your house that would be capital and it would be rent seeking since the act of ambulation isn't improved by the mere act of crossing your part of the road. The act of demanding a toll for the road crossing is what capitalism does as a whole. It says "I will use force to extract rents on things which clearly are a necessary component to life without adding value in said transaction nor pay for the socialization of the costs/risks of my ventures."
>And I really don't see how "placing all ownership of capital in a common trust" is not gigantism.
It's not gigantism because it's not done at a national level. I support radical localism.
> If your company takes money from investors, their wishes are always going to take precedent over everything else.
i think this is a big part of where the "capital" in "capitalism" comes from. ownership and return on said capital ownership is the primary concern
> And they want money.
not just money, they want money as capital for further investments....
i am not an economist, but this seems to me where over financialization starts to loose the plot and go off the rails imo... eveything becomes about finanicial tools and "ownership" control to accumulate more capital, for capitals sake... this wrecks companies and economies alike
> "Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights."
This was extremely powerful @legitster. For some reason this cleared up economic theory to me. These threads get lost in worker rights, but, that has nothing to do with capital. Capital is about ownership rights. You should be allowed to own things and means to your own production. Socialism is about taking these rights away, the debate is which.
> Capitalism is simply an economic system where the means of production are privately owned. Growth is not a requirement or even feature of capitalism.
The problem is that private ownership leads to the classic collective action problem, where actions that are individually rational to each private owner have consequences that are collectively irrational and make the world worse off.
This is not to say that private ownership should be abolished. But there has to at least be a heavy collective counterweight to self-interested wealth accumulation.
> Capitalism puts capital in the hands of private owners for the sole purpose of rent extraction.
That's one possible result of capitalism, but not the only possible one.
> I guess the theory goes that capital invested in profitable endeavors should produce value as a side effect.
No, you have it backwards. Capital invested in profitable endeavors to produce value is the primary effect. You need capital investment to increase productivity, and you need increased productivity to produce more value with the same inputs, which benefits everyone, but also benefits the owners of the capital. In other words, it's a positive sum process.
The fact that ownership of such capital can also be used to extract rents, which is not positive sum, is the side effect.
> it seems the capitalists determined that speculation and protectionism produces far more rent than actual value creation.
Speculation is not the same as rent seeking; it's a legitimate (though risky) form of investment.
Protectionism is not an inherent feature of capitalism; it's what you get when you allow the government to play favorites.
> we still need to find a mode of production that optimizes for producing value rather than rent.
We already have one: free markets, no government playing favorites. The problem is actually sticking to it.
Yes, and, again, equity isn't the only form of investment even within the capitalist system (though, obviously, it's often structurally preferred by investors within that system.) So, even granting, for the sake of argument, the need for capital investment to start firms, that does not imply a need for capital, as opposed to labor, ownership of firms. (See, for a large example even embedded within a capitalist economy, the Mondragon Corporation.)
> Property rights are just an extension to help the underlying basics
That's certainly one of the reasons for formalizing such rights, but “property rights” aren't a special feature of capitalism, what defines capitalism—and this is generally true of each other politico-economic system—is a particular model of property rights. And, yes, in each case they are viewed by defenders of the system to “help” the immutable basic needs of human society.
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