The dichotomy presented between capitalism as the byproduct of division of labor and the inevitability of free-riding in its absence paints a rather stark picture. However, this view presumes a rigidity in human motivation and socio-economic structures that simply does not account for the complex tapestry of human innovation.
Life is not relegated to the binary of paying or not paying for services. Consider that human motivation is not solely hinged on material compensation but also on intrinsic rewards—personal growth, satisfaction, and the joy of contributing to something larger than oneself. The potential for human societies to organize around principles that value these intrinsic motivations equally, if not more than the extrinsic, suggests that the welfare generated by division of labor need not be confined within the traditional frameworks of capitalism.
A more nuanced approach considers economies as organic, adaptable, and evolutionary entities that can incorporate diverse motivational drivers, beyond just financial incentives. In such systems, the fear of free-riding is mitigated not by imposing structures but by fostering a culture where communal contribution is as valued as individual success. This shifts the focus from a simplistic labor-for-pay model to a more expansive, dynamic model that embraces a spectrum of motivations and rewards.
Nope.
Capitalism, at least 21st century western capitalism, consists of 3 things:
1. relatively free markets, in the sense that what can be bought/sold and for how much is only loosely regulated
2. an entrepeneurial culture that supports the idea of "starting a business"
3. the idea that the rewards of any given human venture should go primarily to those who invest capital (rather than, say, labor or IP) in the venture
What you've just described doesn't specifically cover any of these three, and it particularly doesn't cover #3 which is the most pernicious aspect of capitalism (the other two could exist in a system that did not incorporate #3).
Claiming that A, B & C is the same as D surely needs to imply some concern about the actual meaning of D, no?
Pretty sure what I wrote was understandable for most. You probably also understood it, but felt the need to complain about the vocabulary.
The first two may be a necessary precondition for capitalism, but they in no way describe it - they are common elements in human communities that predate capitalism by millenia.
(1) says rewards are assigned based on supply and demand. If labor is scarce and investment is plentiful, rewards will go to labor. If investment is scarce, and labor is plentiful, rewards will go to capital (with the obvious caveat that there are many other factors that affect returns, and their distribution within the pools of labor and capital).
Unfortunately for western labor, there has been an exploding world population and lower barriers to trade & investment flows (globalization) for the last 40 years - hence a huge glut in labor. Rewards have gone to mobile capital, tech businesses and workers in the developing-world, not so much to blue-collar work in the west. But that is mostly supply & demand, not a built-in rule of capitalism.
There are certainly other ways of distributing the rewards, no question about that.
So the question arises: why do the rewards go preferentially to capital in so many of the ventures that exist in our system? Your argument claims that it reflects the (relatively) low supply of capital (compared to the (relatively) plentiful supply of labor; we'll ignore IP for now).
By contrast, I claim that it doesn't reflect that primarily, but is instead deliberate economic/political/legal choice made under significant influence by capital, and that's why we call it "capitalism".
If we lived in a world, for whatever reason, the rewards of a human venture went primarily to labor, we can still recognize that there's a "system" distributing the rewards, but we would not call that "capitalism".
So I'd partially agree with your argument but then invert it: an important reason why the rewards go to capital - i.e. we live in a capitalist society - is that there's sufficiently little countervailing pressure on this arrangement. How much this comes from population numbers, lack of political will, schemeing by the rich etc. is always going to be hard to say. However, a system that didn't work the way ours does would not be capitalism.
Wage-based employment is certainly an economy. It is affected by laws, taxes, regulations, wage transparency, negotiating power, unionization, social welfare benefits, etc. But in the western world, it is approximately a market, and wages are affected by the supply of labor (with skills/without; with education/without; with an artisan skill/or not; prepared to do dull, repetitive, smelly, disgusting job/or not).
How is labor not a market?
And do you know workers with profit sharing, or performance-related bonuses, or share options? Well they are essentially capitalists in their own employer, with some (small, perhaps insignificant) share of the returns to the business.
Do you know anyone who is self-employed? They are solo capitalists, self-started, owners of their shop or tools, and a capitalist of one.
Do you have a pension that owns equities? You are also a capitalist.
You may hate your manager, or envy them, because they earn more than you, and get to boss people around. They are not capitalists. Managers are not capitalists, don't confuse your hatreds. They are only capitalists to the extent that they also get share ownerships and options. Choose your targets carefully, and be explicit in your class-warfare hatreds.
For a system to be capitalist, it requires additional features, and the most significant of these is the way the rewards of human ventures are distributed (i.e. primarily towards those who invest capital rather than labor or IP in the venture).
This is extremely wrong. Every society in human history has some degree of division of labour. Capitalism is a specific economic mode of production that emerged from the embers of Feudalism a few hundred years ago, as merchant guilds and private manufacturors in urban centres gradually grew more independent whilst the noble classes who had subsisted off the labour of an agricultural underclass had gradually lost power. The exact process and reasons for this is extremely complicated and vast in scope.
There is also an unimaginably vast spectrum of potential ways of organising economic production in a human society, and many civilisations historically have exhibited different iterations of these. To make the claim that it is impossible to devise a system different from where
>we don't pay each other,[and] the incentives are very strong to be a free-rider
is not only to ignore not an entire field of historical and anthropolgical research, but also to not even bother to imagine any alternative to very particular unique economic system we happen to find ourselves in this current and infinitesimally narrow slice of time.
Right now in spain, the largest buisness group in basque (10th largest overall) is the Mondragon corporation. It’s worker-owned (but not worker managed), although each worker has voting rights. Clearly it is possible - even within capialism - to have some worker autonomy over production.
In 1936, during the civil war in Spain, around 60-75% of urban industry and agriculture was restructured by anarchist labour unions and run and managed by the workers to varying degrees of collectivization. Some towns abandoned the use of fiat currency entirely and instead used systems of vouchers, in small villages goods where distributed even more informally. Industrial production is reported to have increased during this time, and agricultural yields rose by around 30%.
How? There was no economic failure. It ended due to a political coup. After all there was the slight external complication of a proxy war considered by many to be a prelude to the defining conflict of the 20th century.
>never expanded
Apart from across an entire country you mean?
If I have to grow my own food, compose and perform my own music, build my own housing and vehicles, life will be shit.
If we do have division of labor and pay each other for the work, we've reinvented capitalism. If we don't pay each other, the incentives are very strong to be a free-rider.