"Capitalism is at once far too rational, trusting in nothing that it cannot weigh and measure, and far too little as well, accumulating wealth as an end in itself." —Terry Eagleton, Harper's, March 2005.
The C word
It's a dirty word, and people have been throwing it around a lot lately, in protests in America like occupy Wall Street, by politicians, and even by people such as Noam Chomsky. It is being branded as an anti-capitalist movement, with capitalism coming under fire as much of the cause of the current recession, the inequality in the distribution of wealth, the inequality of power amongst the rich and the poor, as well as being responsible for environmental damage, undermining fair trade, fuelling wars, and supporting political and economic corrupt. Which is a heavy load to be laid at a systems door. And it made me think: Actually, what is capitalism? What defines it? Where does it come from? When does it begin? Is it inherently bad?
The problem with news is that it's new, I realised in the end what I really needed was olds. So, this is my attempt to make sense of the mess we are in, why it has happened, and looking at what the way forward should be.
The Industrial Revolution
There isn't a clear-cut point at which capitalism became the main economic system in this country, but in the 18th and 19th-century there were a number of changes that made it accelerate hugely. One of which was the enclosure of common land by the gentry through a series of acts. The rationale behind this was that new developments in agricultural technology and knowledge made it now less efficient to have individuals farming the collective land. But this was mostly just used as an excuse to increase the wealth of landowners, and to make the poor poorer and even more dependent on their landowners for work, food, and wages. The acts gradually took away more and more of the land on which people had lived and worked for hundreds of years. Before, they had been growing their own food, fuel for heating and cooking, keeping animals, and living on this land. But the Enclosure Laws had forced them to become waged workers, who paid rent for the enclosed land on which they lived.
It's hard to have the capitalist system if there aren't wages. For many hundreds of years people had worked mostly for themselves, and provided themselves with all the things that we now buy, using raw materials that came from their land. The value of things was set by the community in which it lived. But taking away the land and the beginning of waged work meant that people had to buy what they'd previously made for themselves.
A moving population
The Industrial Revolution also had a profound impact on social mobility. For many hundreds of years most of the population lived in the countryside. With increased industrialisation, people were pushed into towns in order to in Cotton Mills and new factories. It became easier to mass produce things, and this had a particular effect those whose income came from home and cottage industry. This led to the formation of the social group The Luddites who tried to fight back against the changes which had left them without jobs. They even went as far as breaking the new looms which they saw as enemy which had stolen their old way of life. Without the resources to live independently, and the reliance on waged earnings, the poor became held hostage to the rising middle classes to whom they worked. The middle class was newly created, populated by entrapenures who had made a huge wealth from industry.
The railway system
Of course all of the materials needed for industry needed to be transported to and from the factories. The new railway system allowed relatively cheap and speedy transportation of large quantities of materials, as did the new canal ways. It's hard to tell which came first, but the growth of industry definitely pushed forward the development of Britain's national transport systems. What is certain is without this transport system, mass production would have been unable to undercut traditional cottage industries.
But the ironic thing was that it wasn't the Industrial Revolution itself that created the horrific urban poverty that mentions in many of Dickens novels. It was the unregulated capitalism which meant that there was no minimum wage for a disempowered class of people who had no other way to survive except to work in these horrific conditions. And that is the problem with unregulated capitalism i.e. "capitalism without an ethical framework preventing exploitation and allowing the workers to benefit as well as the businessmen".
Things are the same today. The desire for ecologically sound, fair trade companies now, is the same desire that led political activists, writers, and ordinary people to fight for the rights of the working population.
The problem of unethical capitalism in the end, is that it's measured not just by productivity, or the benefit to society, but as accumulating wealth as an end in itself. This makes it intrinsically unstable, because the value of things cannot exponentially increase. But I still think that there is ethical capitalism, the capitalism which benefits both workers and employees and the world at large. And I'll be talking a bit about this in my next blog.