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Thursday, September 9, 2010


Mike, this is a really large and complex subject, about which I have written two books and many articles, so I cannot hope to give an adequate reply in a blog post. Do read Marx's CAPITAL, volume One, at least the first eleven chapters or so.

Now, about those coconuts. This little story is what Marx called, rather charmingly, a "Robinsonade," meaning by that a fairy tale a la Robinson Crusoe [the protagonist of Daniel DeFoe's famous novel.] This is exactly the wrong way to think about capitalism. The right way, as Marx shows in CAPITAL [and following the lead of Adam Smith in this regard] is to study its historical growth and development. Briefly, Marx argues, what happened in England [and elsewhere] was that the peasant farmers were displaced from the land on which they had gotten their living, and forced to migrate to the cities, where, without any access to or ownership of the means of production [land, forests, mines, rivers, tools, etc], they had no choice but to sell their labor as factory workers. At the same time, production for use -- growing food to eat, making clothes to wear, etc -- was replaced by commodity production, which is to say production of things that could be sold at a profit in a market. Those who had taken control of the means of production were in a position to force down the wages of the workers, and regularly took for themselves ["appropriated"] the surplus, or profit, left over after they had paid for their inputs [including labor] and sold the commodities that the workers had made by their labor. Over time, the owners or controllers of capital grew richer and richer, while the workers were forced to keep struggling to stay alive. The workers were only able to raise their wages and live better when there was, for a time, a shortage of labor, or by organizing into labor unions and forcing the employers to raise wages and shorten the working hours.

This, not a fable about desert islands and coconuts, is the real story of capitalism, and it may help you to begin to understand what I find objectionable about it.


Mike said...


I realize my island tale is a fable, but I think it's nonetheless revealing. It may show that you don't really find capitalism inherently objectionable. Rather, you object to a set of historical contingencies. More precisely, you seem to object mainly to capitalism's inegalitarian roots.

If this is right, then it has implications for how you ought to proceed. If capitalism is inherently objectionable, then it makes sense to seek an alternative or a supplement. But if it's objectionable only because of initial inequality, then it makes sense to keep capitalism but to try to correct for the inequality. There are, of course, familiar ways to proceed in this direction.

As for reading Capital, I'll put it in the queue. I tried reading Marx some years back but found it unclear, turgid, and laborious.

JP said...

Professor, mind explaining what you/ Marx have against Robinson Crusoe stories in general? Would you also give your view of why only a vanishingly small fraction of economists buy the marxian analysis of capitalism? On a related note, do you have any views on geolibertarianism? It combines communal ownership of the natural means of production with a non-paternalistic welfare state.

Noumena said...

Mike -

Consider a medical analogy: Having a certain species of spirochetes in your bloodstream is a necessary, but not sufficient, condition for having syphilis. We usually say the spirochetes cause syphilis; that's fine, so long as we keep in mind that some people have the spirochetes (and can transmit syphilis to others) without having the disease, and thus the causal connection between the spirochetes and syphilis is, in that direction, contingent. Now, having the spirochetes is not inherently objectionable; it's syphilis and all its horrible symptoms that's objectionable. But the only real treatment for syphilis (as far as I know) is to use antibiotics to kill the spirochetes. In particular, the right course of action is not to treat the disease while leaving the spirochetes in place. There is no way to treat the disease while leaving the spirochetes in place.

Back on the economic side of the analogy, you suggest that it's not capitalism that's objectionable; it's the inequalities and exploitation and other injustices that are contingently connected to capitalism. But it doesn't follow that the right course of action is to correct the injustices without replacing capitalism. You need the additional premise that there's a way to correct the injustices while leaving capitalism in place.

Robert Paul Wolff said...

Noumena has it almost completely right. Look, the private ownership and control of the means of production, and the exclusion of most of the population from that ownership and control, is not an accidental or contingent or "merely historical" feature of capitalism. It IS capitalism. Redistributive taxation and social safety nets are fine. I am all for them. But they do not, they cannot, change the fact that capitalism rests upon exploitation -- which is to say the appropriation of the social surplus by those who are able to effect that appropriation by controlling the means of production [and the means of violence].

Why do so few economists take Marx seriously? Well, that too is a question requiring a long historical answer, but the simple answer is that the economics profession is a bought and paid for subsidiary of capitalism. It used to be claimed, by "mainstream" economists that Marxian economics was not mathematically sophisticated. Then, in the 1960s and 70s and 80s, brilliant mathematical economists around the world recast Marx's theses in appropriately fancy mathematics, which is quite as elegant as the mathematics of the neo-classical general equilibrium theorists. Predictably, this had zero effect on the economics profession.

Here again, I could, given a semester, taken you through all of this, but just as you wouldn't expect a mainstream economists to be able to expound the arcana of that ideology in a blog post, so you cannot expect me to overcome four or five generations of misinformation in a few sentences.

But please, no more coconuts. That simply is not what capitalism is about!

Mike said...

Noumena (and Robert),

Your logic is flawless, but I think my missing premise – that capitalism’s problems can be repaired without dismantling capitalism – is defensible. If the problem with capitalism is that people start from a position of inequality, we can ameliorate this, say, with an unconditional capital grant, paid for, say, through inheritance taxes. And if the problem is worker exploitation, which stems from a lack of bargaining power, we can offer unions legal protection and/or provide workers with an unconditional basic income so that they can reasonably refuse bad job offers. All this, it seems to me, can be done within capitalism – without changing the modes of production and distribution.

Even if all this were done, though, Robert would still find cause for displeasure. Even if we instituted a generous unconditional basic income and a generous capital grant, paid for through taxes, say, on corporate profits and inheritance, he would still object on the grounds that capitalism, as he puts it, rests on exploitation – on the appropriation of the social surplus by those who control the means of production. But then, despite his distress at having to discuss coconuts, I insist on returning to my fable, since that fable clearly features just the kind of exploitation Robert claim to abhor. In that story, the inventor of the coconut gathering machine controls the means of production and thus “exploits” the other party. I submit to you, however, that this is exploitation merely in a technical sense. It is not normatively interesting.

Of course, I’d be happy to consider arguments to the contrary. But that, I think, will require that we discuss the coconuts, Robert’s consternation notwithstanding.

Chris said...

Well Mike, it seems to me, what you're proposing is so heavily regulated, and mixed it up, it ceases to be 'capitalism.' If capitalism - in the sense of what's described in On Capital - and your model were placed side by side for a martian to juxtapose, do you think he'd conclude he was looking at capitalism in both? Instead, you're aiming more for democratic socialism.

Mike said...


I think I'm describing welfare capitalism. I'm not proposing much by way of regulation, but I am proposing wealth redistribution. Ownership of the means of production, however, would remain in private hands, so it won't do to call my proposal a version of socialism.

I think what you're picking up on, though, is that the notion of ownership is somewhat fluid. To own something is to have a bundle of rights (rights to use, to rent, to sell, to profit from, etc.). Unabashed capitalists believe in full ownership rights, so to speak. Welfare capitalists like myself believe that ownership rights should be somewhat more limited. While Robert, perhaps, wishes there were no such rights at all, at least over the means of production. But I think that my view and Robert's are far enough apart such that our disagreement is not merely verbal.

Chris said...

Well, no, you're also expecting Unions to have a legally backed voice, and I presume for this voice to be democratically in favor of supporting such a voice; otherwise it would be removed immediately. You're actually envisioning a government that backs the worker and the union in the face of the private capitalist. Good luck achieving that goal without some kind of Democratic Socialism.