Capitalism 101

The history of capitalism as it has operated in the last twohundred years in the realm of Western civilization is therecord of a steady rise in the wage earners' standard of living.The inherent mark of capitalism is that it is mass productionfor mass consumption directed by the most energetic and far-sighted individuals, unflaggingly aiming at improvement. Itsdriving force is the profit motive, the instrumentality of whichforces the businessman constantly to provide the consumerswith more, better, and cheaper amenities. An excess ofprofits over losses can appear only in a progressing economyand only to the extent to which the masses' standard of livingimproves. Thus capitalism is the system under which thekeenest and most agile minds are driven to promote to thebest of their abilities the welfare of the laggard many.

To Mobilize and Transform

• Critical-Utopian• Understanding-Empathetic

Continuum of Control

Social Control (democratic, local, popular, state?)

to

Capitalist Control (corporations, state, financial)

Iraq- Neoliberalism

• Privatize economy• Allow foreign investment• Free trade• Allow repatriation of profits• Flat tax

Neoliberalism

• No more “outside” to capitalism - no morecommunism, or trade union movement

• Capitalism becomes the sovereign• Neoliberal subjectivity - the competitive

commodified self• Chile 1973 to Iraq 2003 - 30 years of

building this kind of state-personcombination - Where did it come from?

What is Capitalism?

• “accumulation for accumulation’s sake,production for production’s sake – MarxCapital

• 1750

Sheffield steel works

What is Capitalism?

• Means of production owned by minority– Investment

• Wage Labor• Primitive Accumulation• Investment innovation - Finance capital

Markets

Amsterdam stock exchange

What is Capitalism?

• Is the US unique?– Mobility, cultural egalitarianism, immigration,

popular sovereignty• Ethos

– sensibility, social imaginary, spirit of capitalismrationalization-differentiation, freedom,individuality

3 moments - 3 theories

• Classical (anarchic?) Capitalism– Adam Smith

• Managed Capitalism– John Maynard Keynes

• Neoliberal Capitalism– Fredrich Hayek, Milton Friedman

Capitalism Growth and Crisis• Why expanding system?

– Competition between capitalists– Logic of investment

• Where to invest surplus? Barriers?– Labor– Markets– Materials– Financial mobility

• Crisis - 1848,1929, 1973, 2008– System stops - surplus of labor and capital side by side– Lack of wealth in motion– So move it around find new investment opportunities

Mountaintop coal mining at Hale Gap, VA.

Can it Go Forever?

Keynesianism (popular control orcapitalist survival?)

• Depression• Labor Movement• Public expenditures• WWII - nationalized economy• Women in the labor force• After War - how to absorb surplus?

– Armament race, imperialism, public spending, marshallplan

– Urban crisis

1970s - Fall of Keynesianism

• 1950s 60s von Hayek - ignored• But 1973 crash• Extra petrol dollars, dollar off gold standard• Seen as opportunity for class revitalization

and neoliberal practices• New York

– Financial take over

Neoliberal State

• Human Welfare reliant on private propertyand free trade

• Labor• Markets - Loans, IMF• Growth of Finance Capital

Class project?

• Concentration of Wealth– 1970s top 1% got 7-8% of income– 2000 they got 16%

• Accident?– Right wing NGOs - moral majority– Take over of Republican party

• Money from Where?– Dispossession– Privatization– Financial expansion

Do we like it?

• Logic - competition vs cooperation• History

– Disparity of wealth– Poverty/ life expectancy

• Subjectivity

Ethics/ Effects of Neoliberalism• Inflation adjusted percentage increase in after-tax household income for the

top 1% and the four quintiles, between 1979 and 2005 (gains by top 1% are arereflected by bottom bar; bottom quintile by top bar)

"Aron-Dine, A. & Sherman, A. (January 23, 2007). New CBO Data Show Income Inequality Continues to Widen: After-tax-income for Top 1 Percent Rose by $146,000 in 2004."

But…

Who Decides?

• Ethos- subjectivity• Control over the surplus• Form of economic relationships