One of Karl Marx’s cleverer notions was to come up with a label for the economic system that had slowly emerged from the feudal period in Europe. It wasn’t ever the result of some overarching plan or campaign, it was just the easiest way for producers and consumers to connect without coercion or force. It had no real name until its declared enemy named it:

Capitalism did not begin in a boardroom. Voluntary exchange, repeated across generations, built the fairs, the credit networks, the double-entry books that Luca Pacioli codified in 1494. Nobody planned this. That’s the whole point.

The story you learned in school runs backwards. You were taught that greedy factory owners exploited children until noble legislators rescued them in 1833. What actually happened: the Industrial Revolution dragged English living standards up so fast that population doubled between 1750 and 1850 because people stopped dying. Wages rose. Life expectancy rose. The factory that horrifies the modern reader was an upgrade from a life of starving on a tenant farm at the mercy of the harvest. Children worked because their families were poor, and the factory made those families less poor. The reformers arrived after the market had already done the heavy lifting, then took credit for the sunrise.

Real capitalism needs sound money, and here is where the tragedy sharpens. Between 1815 and 1914, under a classical gold standard, prices in Britain fell gently while output exploded. You could save a coin and expect it to buy more later. That world died in stages: 1914, when governments suspended gold to print [money for] war; 1933, when Roosevelt confiscated citizens’ gold at $20.67 an ounce then revalued it to $35; 1971, when Nixon closed the window entirely and handed us the pure fiat regime you live under now.

What followed was corporatism wearing capitalism’s coat. When the Federal Reserve can conjure trillions and hand them to the banks and firms closest to the spigot, you no longer have a market allocating capital. You have a cartel allocating privilege. The 2008 bailouts were a monetary system doing exactly what a monetary system built on the printing press does.

When someone blames “unfettered capitalism” for the mess around you, ask them to point to the fetters.

The answer is to let go. Less regulation, no central bank, less tax, less government. Not more!

A few days ago, Severian point out:

Title page of Das Kapital in the first German edition of Volume 1.
Wikimedia Commons.

At its broadest, “system” means something like “the appearance of rule-governed behavior”, and so yeah, “capitalism” is a “system” in that sense. The “law” of Supply and Demand is a “rule”, if you like, and we can start piling on the ACK-shullies from there. But it’s not particularly useful trying to analyze why and how it happens; the only thing we need to proceed is to acknowledge that it does.

“It” being “reification“, which you’ll recall means “treating an abstraction as if it were a real object”. Synonyms (per Wiki) include “concretism, hypostatization, or the fallacy of misplaced concreteness”, and while I personally dig “hypostatization” — it’s got that groovy Gnostic ring to it — “reification” is easier to type; plus it was very successfully repurposed by Marx and we might need that later, so “reification” it is. Calling “the natural human tendency to exchange stuff for other stuff, each party pursuing what he perceives to be his own advantage” Capitalism is a reification. It’s useful rhetorical shorthand …

… but it carries with it a tendency to mistake the map for the territory, you dig? Instead of confining yourself to “the natural human tendency to exchange stuff for other stuff, each party pursuing what he perceives to be his own advantage”, you inevitably start talking about the “rules” or “laws” of Capitalism. And from there, it’s just a short leap to our course title: the morality of Capitalism.

Because that’s what rules are for, no? To keep things fair — or equal, if you prefer. If we want to find out who’s better at tennis, let’s say, we set up a bunch of rules, to eliminate from the outcome every “inequality” but skill (and dumb luck). Both players have to agree on the scoring. Tennis, therefore, really is a system, strictly speaking. It really is a game, in the mathematical and linguistic senses.

Tennis is not a reification. When we talk about tennis, we are talking about the rules of the game, or the outcome of an individual match. That’s it.

But watch what happens when we start talking about the “rules” of Capitalism. The very word “rule” (or “law”) unavoidably contains the notion of fairness. The rule determining “out of bounds” in tennis is explicitly designed to make the game fair, because that’s what game rules are for — to make the players equal in every respect but skill. You couldn’t know who is the better tennis player if the rules were arbitrary; “out of bounds” has to be clearly defined, and universally applicable.

If you start talking about the “rules” of Capitalism, then, you might not think about “fairness”, but you can’t help but feel it.

Which the contrast with Communism makes worse. Because of course “Capitalism” and “Communism” are “dialectically constructed”. I don’t like throwing Marxist jargon around, but it’s useful in this case. Because Communism is a system, or a game, or whatever word you prefer. Communism does have rules, and they are explicitly designed — like the rules of all games — to ensure equality.

(And they do, comrades, they really do. As P.J. O’Rourke pointed out back when he was funny, Communism is as fair as it gets. We’re all equally broke, starving, and dead, but goddamn it, we’re equal).

I’m sure I don’t have to tell this crowd what a bad idea it is to let your enemies define things for you, but that’s what “Capitalism” does. Karl Marx his own self invented that term. Pick your famous “Capitalist” thinker — Adam Smith, David Ricardo, whoever. They didn’t call themselves “Capitalists”; they called themselves political economists. They weren’t devising rules for a game; they were describing phenomena they observed. It was only after Marx slapped the “Capitalism” tag on the natural human tendency to exchange stuff for other stuff, each party pursuing what he perceives to be his own advantage, that we started seeing “Capitalists”.