S. Hussain – Encyclopedia of Capitalism (3 Volume set)

Автор: S. Hussain
Название книги: Encyclopedia of Capitalism
Формат: PDF
Жанр: Политология и Социология
Страницы: 1187
Качество: Изначально компьютерное, E-book

The first and only encyclopedic set focusing exclusively on this phenomenon, Encyclopedia of Capitalism provides clearly written definitions, descriptions, and explanations of topics and terms that one is likely to encounter when studying capitalism. With more and more countries participating in capitalist business practices, this work serves as a timely, accessible reference on the subject.

THE FACT THAT WE live in an era of capitalism is
universally acknowledged by both the laity and the
priesthood of social sciences. The dynamism in the production
of wealth and the social progress associated
with the historical development of capitalism are also
generally conceded. However, passionately controversial
debates ensue as soon as an effort is made to specify the
defining elements—the essence—of the social system
called capitalism.
What is capitalism? A dictionary definition, for example,
is generally stated as an economic system characterized
by freedom of the market, along with private
ownership of the means of production and distribution.
Simple enough at the outset. But, if one looks at the institution
of markets, one finds them in primitive, slave,
feudal, and even socialist societies. Perhaps, one could
assign a teleological design to an ever-expanding market
as an indicator of choice and freedom achieving its
zenith in the full flowering of capitalism. The fully
fledged actualization of a market system in this view, in
a way, is a herald of the end of history: Capitalism must
reign forever since it is coeval with human freedom.
Another view explains the pervasive and guiding
role of markets under capitalism—the invisible hand
metaphor of Adam Smith. While individual human beings
pursue their own selfish interests, the market forces
bring about not only a technical equalization of things
bought and sold (i.e., produced and consumed) but also,
as if behind the backs of the unsuspecting operators, a
socially beneficent outcome is generated—an optimum
optimorum—the best of all possible worlds. The implied
belief system is to yield to the deity of the inherently virtuous
invisible hand.
Yet another strand of thinking questions the wisdom
of reposing such sovereignty in the market forces—
expressing our productive potential as producing commodities
for the market, satisfying our human needs
through buying from the market—as it bypasses direct
human interaction, thus leading to alienation from other
human beings, and creating a profound malaise of the
modern capitalist era. Does the freedom of the market
take precedence over the freedom of human beings? The
question remains.
A second defining element of capitalism has to do
with the private ownership of the means of production,
presumably to effect efficient utilization as well as efficacious
stewardship of resources. Those who produce
the smartest get to receive the most returns. And the expectation
of future returns assures a rational interest in
the proper maintenance of productive resources—the
cliché of “nobody ever washes a rented car” is invoked
to reinforce private ownership. True enough.
However, if one examines the actual state of the relationship
between private (individual, corporate) and
collective (government) ownership in the advanced capitalist
economies, it becomes obvious that the collective
control of national income (the gross national product)
varies from a third in North America to about a half in
Western Europe. This, of course, does not take account
of the collective ownership of stocks and bonds through
pension funds, etc. Also, despite repeated and frequent
spates of privatizations, the average weight of collective
ownership has been on the rise. This can be explained by
examining the role of the state in a private market economy.
A market economy is premised on the notion of
private property, which in its essence requires the exclusion
of potential claimants. The enforcement of this exclusion
requires a potential, sometimes actual, use of
coercive power. Individually centered protection of private
property can be awfully expensive, hence irrational.
Therefore, we have the historically concomitant rise of state power along with the development of capitalism,
as well as its public acceptance even when grudging, as
in the “necessary evil” conceptualization of government.
This formulation of the collective in service of, and
subservient to, the private ownership concept tends to
leave out a prior theoretical issue. How does private
ownership of the means of production come about in
the first place? The textbook economic literature essentially
assumes the problem away. The problematic is defined
to focus on efficient allocation of resources in the
market setting where the economic agents appear with
varying initial endowments. This truly is rephrasing the
myth of the proverbial stork randomly granting the
baby in the pouch with certain gifts—initial endowment.
A more sophisticated explanation would rest on the obvious
laws of inheritance, talent, industriousness, and a
random factor of luck—not an entirely robust explanatory
formulation, much less a morally defensible one.
The skeptic must look for a sharper angle to discover
the deeper meaning of this emphasis on the private
ownership (by some) of the means of production. By the
same token, it implies that there are others (indeed
many, the majority) who are deprived of their own independent
means of survival under capitalism. This introduces
the notion of social classes in the system—those
who own the means of production (the capitalists) and
those who do not (the workers) and must access them
via the courtesy of the former—a relationship of dependence,
inequality, and possibly exploitation.
The real significance of private property in the
means of production is that a worker can be excluded
from the use of tools necessary for productive activity
unless the worker agrees to share the produce of labor
with those who own capital, the tools of production. An
obvious corollary of this is that as in feudalism, where
the serf did the producing and the lord got most of the
share of total product, under capitalism the actual production
is undertaken by the workers, and the capitalist
is assured of a lion’s share of the produce. Not only that.
The market mechanism, through competition, allows
only a socially determined subsistence to the worker
whereas the capitalists get the residual—the social surplus—
as their reward. Thus, capitalists have a basis for
enhancing their property of the means of production,
and maintaining and consolidating their class privilege.
The creation of wealth. A stellar characteristic of capitalism
is its fantastic capacity to produce goods and
services: wealth. Much as it is celebrated, it is also
mostly justifiable. By any measure, if one were to stack
the millennia of production of all previous social formations—
primitive, slave, feudal—it would pale into insignificance
when compared to the production of this
relatively young, in a historical sense, social system that,
according to varying accounts, established itself during
the so-called long century, 1350–1550. The transformation
of feudalism into capitalism, initially in western Europe,
is accompanied with an era of enlightenment,
scientific discovery, industrialization of production, expanding
trade, and dissolution of many social barriers.
The transformation involves not just the application of
scientific technique to production, but also the necessity
of continuous innovation that is required by the inexorable
forces of market competition.
It is in this context that one can appreciate the
unique category of capital as being similar to wealth in
the sense of accumulation of social objects of use, but
also quintessentially distinct in the sense of its drive to
dissolve into money capital, to buy physical commodities
to produce more commodities that in turn had to be
sold for more money for their realization as capital, and
so on as a continuous circuit of production and circulation.
This ceaseless and insatiable quality of investing
for production and reinvesting for more production in
the face of competition from market adversaries lends
capitalism a special penchant for excellence in production.
Mercifully, all schools of thought are in happy unison
in praise of this aspect. But there is more.
Whereas the earlier social formations concentrated
the wealth objects in the exclusive possession of the ruling
classes, the dialectic of capitalist production requires
that, as part of the efficiency of production, the
commodities produced should be cheapened enough for
the working classes to partake of this abundance, and
experience a relatively higher standard of living. Money,
the common denominator of all valuations in the system,
requires that produced commodities be sold in the
market to realize their money value. That is the secret
of appropriating social surplus: the making of profits in
the system.
Thus, the expanded production leads to a commensurately
expanded market. For all of the products to be
sold, the efficiency in production shows up as cheaper
products, which in turn enables the working classes to
participate in the market to raise their standard of living.
The historically unprecedented high standards of living
of advanced countries are a testimony to this dynamic.
The partisan champions of the system emphasize this
empirical reality as proof-positive that capitalism equals
prosperity.
In this view, capitalism’s frontiers are described by
the geographical areas of Western Europe, North America,
and Japan. But capitalism, from its very inception, is
a global system—the long-distance trading, ocean-faring
adventures, colonial capture of far-flung areas for resources
and markets are essential features of its development.
The social systems of Honduras, Guatemala,
Bangladesh, Botswana (and most of the so-called Third
World countries) are shaped by and in the image of
western capitalism. A cursory look at these societies negates the equation of capitalism equaling prosperity.
One way to look at the system is to suggest a differential
system of distribution within countries (favoring the
governing classes), and between countries (favoring the
core countries). This hierarchy of privilege can explain,
to some degree, the existence of scarcity and deprivation
in some social classes and some geographical areas
under the sway of capitalism. While capitalism helps dissolve
and destroy the hierarchy of pre-capitalist eras, it
establishes a new hierarchy of its own with consequent
deleterious effects.
The politics of capitalism. Another major claim often
asserted vociferously is that capitalism equals freedom
and democracy. Again, the empirical evidence of advanced
capitalist countries is cited to stunning effect.
The logic of market is truly democratic: one dollar one
vote, more dollars more votes. Indeed, the market recognition
of any human need is in proportion to the money
endowment one commands. This leads to the hierarchy
of the elite. However, there is another side to it. If you
have money, you can overcome the barriers of caste,
creed, race, and social status—an amazingly leveling
phenomenon. In addition, anyone can strive to earn, to
accumulate money (at least in theory), thus overcoming
shortcomings of birthrights, conferred honors, etc. Since
the universe of capital runs on the measuring rod of
money, anybody with money can express freedom commensurate
with that valuable commodity.
As for democracy, the record is at best mixed. We
need only cite the varyingly undemocratic governments
of today’s Third World countries, but can also look to
the easy historical co-existence of capitalism with fascism,
militarism, and allied totalitarianisms. It is for this
reason that critics of capitalism can, with some effect,
decry the extant modes of democracy as, in reality, dictatorships
of the bourgeoisie. We have some ways to go
to achieve true democracy in the field of the economy as
we have done in the sphere of the polity: one person,
one vote!
The mainstream expositions assiduously avoid the
issue of fairness or equitability (perhaps exploitation) in
the market setting as a value judgment beyond the domain
of scientific analysis. Is market price of labor
(wages) a fair compensation for work in some sense?
The question is obviated if we accept a market determination
of personal or social values as not only inevitable,
but inherently desirable. This view is buttressed
by the notion of the social contract between capital and
labor. Since, in this view, workers voluntarily agree to a
specific wage (presumably market determined, directly
or indirectly), there is no sense of unfairness or exploitation
in this relationship. Perhaps. But what, as some
have pointed out, if the workers have no choice but to
enter into an agreement with capital, since they do not
have their own independent means of production or survival?
Could this, then, be a contract between un-equals
subject to nullification?
Generally, it is claimed that capitalists sacrifice
through saving (not consuming) and workers do not,
hence the extra share for the capitalists is justified. But, if
one examines this closely—just as a thought experiment—
one may arrive at a divergent conclusion. When
investment goods (machines) production increases to expand
investment, the consumption goods (bread) production
declines, thus leading to relatively higher prices for
consumption goods—the marketplace expression of belttightening.
But who ends up consuming less bread as a result?
The workers or capitalists? And when investment
does expand the overall production, who controls the additional
benefits of production? Workers or capitalists?
The best we can say is that, through a trickle down, workers
also gain at the end. They do, but in relation to each
one’s sacrifice? A corollary of this thought experiment is
that the slave and the serf could clearly see the obvious exploitation
by the overlord as expropriation of the produced
value. The expropriation of surplus under
capitalism is veiled through the mechanism of the market
that, like many things in the system, renders it invisible.
A more formal presentation equates land, labor, and
capital as factors of production—each factor in turn receiving
its due desserts—the so-called theory of marginal
productivity. Since all produce is exhausted as a result of
compensating the three contributing factors, there remains
no social surplus to fuss over, and hence no possibility
of exploitation. The fact that it is the landlords
and capitalists, not the inanimate objects—land and
capital—who are receiving the share of the produce,
without contributing their labor directly to the process,
remains elusive. Here, there is no friction, conflict, or
contradiction of subordination. Therefore, there is no
reason for resistance to the system or appeal for reform.
Capitalism and human beings. Lastly, how is the logic
of capitalism related, if at all, to the nature of social construction
and the essence of human beings? Here, the
mainstream view is crystal clear. Human beings are, and
have always been, essentially homo-economicus—i.e.,
they are by nature self-interested (selfish?), individualistic
(self-centered?), acquisitive (greedy?), and rational
(calculating?). And if you do not agree, observe them in
a market setting, we are told. Sure enough. How would
anybody, with some modicum of common sense, react
to the exacting conditions of survival in a market setting?
Besides, the notion of labor as a commodity, something
produced for and purchased from the market, is
repeated incessantly in the same breath with land and
capital. Labor is co-equal with land and capital, to be
bought and sold and pressed into service for production
at the beck and call of capitalism. This, in a way, is an example of dehumanization par
excellence. There are no human beings in this model,
just commodities—commodities that acquire the social
attributes of interacting with each other in exchange
through the market. That the commodities for sale represent
purposeful labor of a human being is lost in the
shuffle. People do not interact with, or depend on, or express
their sociality with other people—all this is mediated
in the market through commodities’ purchase and
sale. There is no temporal transcendence, no reform, no
resistance—the peaceful reproduction of the capitalist
system continues. Of course, one still has to confront the
daily world of capitalism full of roiling resentments,
wars of conflicting interests, and general chaos of humanity
under duress. But, still capitalism continues on.
No introduction can be concluded without some future
prognosis of the system. This is the trickiest area in
social sciences, hence left untouched for better or worse.
However mystical this terrain, one can take a bit of a
risky peek. The economic side of the system is prone to
recurring ebbs and flows—expansion, contraction, recession,
depression, and stagnation and resurgence yet
again. Many theorists have suggested tentative remedies
of reform and control of the system. Some have argued
for a structural rearrangement. Others have argued for a
romantic return to the earlier (more pristine) formulations.
One thing is clear. Through the zigs and zags, trial
and error were built into the ever-changing nature of the
system, and an abiding drive of humanity has been to
raise its level of humane consciousness. The system of
capitalism, by the end of the 21st century, is likely to be
a lot more democratic, with freer access to its productions,
less rapacious of environment, and more receptive
to the better instincts of human beings.
The Encyclopedia of Capitalism. Any work with pretensions
of being encyclopedic is a daunting enterprise. To
carry out this project on the topic of capitalism—itself a
tricky subject—is doubly intimidating. Even so, the organizing
principle of the work is to present topics and articles
that describe the historical evolution of capitalism as
a system of social relations in production and distribution.
This evolution essentially relates to a transformation
from feudalism into the meteoric rise of industrialism. At
the same time, a system of ideas came into social acceptance
after vigorous debate. We present this strand of ideas
as a history of economic thought—a new lexicon, a different
perspective, the capitalist paradigm. We also present
the advance of capitalism through wars, colonization,
and imperialism to the modern day: the ultimate triumph
of unchallenged domination. This encyclopedia covers
not only the spread of the system itself but its myriad benefits
to humanity that make it so universally appealing:
the “Why?” of capitalism, if you will.
Here, along with commentaries, debates, and pointsof-
view, we strive for objectivity and balanced perspective.
Yet, we emphasize the nature of the system’s vigor
that compels and nourishes innovation of technique as
well as organization—the real secret of capitalistic success.
Lastly, we include reference to capitalism’s effect on
the overall condition of humanity both in the United
States and internationally. To accomplish this task, more
than 700 articles were prepared with the following features
in mind:
• Descriptions of major world countries and their economic
histories as they relate to capitalism.
• Biographies of winners of the Nobel Prize in Economics
and how their theories and discoveries affected
capitalism.
• Profiles of the top global companies and explanations
of how each employed the tenets of capitalism
in achieving their global status.
• Descriptions of all U.S. presidential administrations
with a focus on how their policies affected the development
of American capitalism.
• Historical biographies of American and international
capitalistic entrepreneurs and how their ideas, inventions,
or discoveries led to the creation of enterprise.
• More than 100 article entries on major historical
events, social movements, technological advances,
and personalities that affected the development of
capitalism.
• Definitions of economic business terms and theories
relating to capitalism.
More than 100 authors, affiliated with universities, research
organizations, and business activities around the
world were invited to write on the topic of their specialization.
We hope the Encyclopedia will serve as a useful
and outstanding reference work, as well as a resource for
teaching courses in economics, political science, history, international
relations, sociology and other related fields.
SYED B. HUSSAIN, PH.D.