Part 3 Section I in the Series
There are many views concerning the origination of Capitalism. Where it began is not very important compared with how and why its components and overall concept emerged and developed. Enclosure (the legal consolidation of small farms into larger farms which, once enclosed, restricted use to the owner) became widespread by 16th century England. This essentially transformed land from a means of subsistence into a means of profit making on commodity markets. The increased efficiency resulting from larger farms, created a surplus of peasants; these displaced former farmers became the wage workers in factories. In the late 1700’s, Adam Smith published “The Wealth of Nations”; in this thesis, he stated that humans had a natural tendency toward self-interest (selfishness) and if everyone could produce and trade as they pleased, greater prosperity would result than with government regulations (non-government intervention in commerce is commonly referred to as free trade) – It is Adam Smith that is credited for laying the foundation of modern Capitalism. In the early 1800’s, a few businessmen in Albany, New York mused about the cost of drunkenness on society. Their broader views on valuation would have substantial influence on the fine-tuning of the Capitalist economy and on American society as a whole.
“Imagining their entire town as a capitalized investment and its inhabitants as income-bearing inputs of human capital that could be plugged into output-maximizing equations of economic growth, the Albany businessmen’s novel investmentality measured progress and well-being by pricing the effect certain labor and consumption patterns had on market productivity and capital accumulation.”… “As use of these investmentality metrics spread, the maximization of monetized market production and consumption became a chief statistical objective of American social policy, concurrently transforming prices into the standard unit Americans used to value not only their goods and businesses but also their future, their communities, their environment, and even their own selves.” – The Pricing of Progress by Eli Cook.
By monetizing life, commerce acquired priority status over the welfare of citizens.
When the Civil War ended in the late 1800’s, the 14th Amendment to the Constitution was passed granting citizens equal protection under the law. Shortly after the passage of this amendment, the Supreme Court granted corporations much of the same rights. And, in 1978 the Supreme Court ruled that corporations, under the First Amendment had the right to spend money to influence state ballot initiatives. Only three decades later, in 2010, the Supreme Court would expand that right to all federal, state, and local political campaigns.
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.” —U.S. President Abraham Lincoln, Nov. 21, 1864 (letter to Col. William F. Elkins)
At the core of Capitalism is the right to own private property and a free market system. Socialism, though it has many different models, is often perceived as the antithesis of Capitalism. To Karl Marx and Frederick Engels, socialism is simply the transitional phase between capitalism and a “higher phase of communist society”. A “communist society” being defined as one where the government owns all means of production and land (individuals own nothing except the necessities of life) and people work for the government and the collective output is redistributed equally. The only way equal distribution would be accepted by the people would be if the majority of the people believed that all people were the same and contributed the same; otherwise, even though everyone received the same package, some would feel slighted due to their extra contribution. Because people are unique from one another, the idea of communism is rather unrealistic.
Socialism is thought of more in terms of an economic model than a governance model like communism. Some key elements of a socialist economic system include two types of property ownership – personal property, such as houses, clothing, etc. owned by the individual and public property such as factories, schools, utilities, etc. owned by the Government but with worker control – and the means of production are owned by public enterprises or cooperatives with individuals being compensated based on the principle of individual contribution. Production can be coordinated through either economic planning or markets.
To boil down all three into simple terms we can equate Capitalism with me, Communism with us, and Socialism with me and us. There is a third party that is missing from all of these systems and that is nature. A social and economic system that incorporates the needs of nature as well as people is required in order to support harmony in life. We’ll refer to this system as Ecoism – a socioeconomic system for the individual, all people, and the planet.
This concludes Section I. The next section will elaborate on the economic side of Ecoism.