Final Word

The animal in capitalism runs deep

Capitalists.jpg

Have the animal instincts from the roots of capital turned capitalism into the top survivalist amongst the array of economic systems across the globe and throughout human history?

This is quite a legitimate question if one considers the fact that today, in countries that call themselves Communist, like China, capitalism has become the main driver of economic growth.

And, while capitalism indeed showed strong growth in tandem with the spread of democracy during the 19th century, it also coincided with the Industrial Revolution. Indeed, the term from that time was ‘industrial capitalism.’ Many political scientists, political- analysts, and commentators have lately expressed concerns that democracy is in trouble globally, and by extension, so is capitalism.

However, if one takes a holistic view of the political-economy, both globally and through history, it appears that the marriage between capitalism and democracy is one of convenience.

Delve a little wider and deeper and you find that capitalism has thrived, and is thriving, under just about any form of political regime, from despots, authoritarian, dictatorships, oppressive, and now communist. To stretch the earlier marriage figurative use, capitalism is clearly a serial bigamist.

A divorce between democracy and capitalism is very unlikely – that is just not capitalism’s ‘style.’ If, however capitalism loses democracy through death, it is sure that capitalism will just replace it with whatever comes next in its place.

What is capitalism?

The answer to the above described phenomenon is to be found in the constituting components of capitalism. The top authorities on the English language give a definition of capitalism that mostly goes as follows: An economic system and ideology based upon ownership of the means of production and their operation for profit.

This definition goes back more than a century, and a more modern, present-day definition reads:“An economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.”

There is some debate amongst etymologists and historians about who first coined the term.

The Oxford English Dictionary credits William Makepeace Thackeray for the first published use of the word ‘capitalism’ in his 1850s novel, The Newcomes. However, he used it in the context of being finance capital, rather than as a system.

Other sources claim the term was first used by Louis Blanc in 1850, writing: "What I call 'capitalism' that is to say the appropriation of capital by some to the exclusion of others.")

Pierre-Joseph Proudhon in 1861 also wrote about capitalism as an"… economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labour."

As a system

Renowned economist Adam Smith is widely regarded as the "father of capitalist thinking," laying the foundations of the system. He, however, never used the term, and preferred what he described his favoured economic system as "the system of natural liberty – the freedom to make economic decisions in matters like ‘asking-‘ and ‘paying’ price when transacting.

Smith, however, in his analysis of human history called the ‘fourth age of man’ – after Hunting, Shepherding and Farming – Commerce, and he, in 1759, coined the notion of ‘the invisible hand’ of the market in commercial transacting.

The term capitalism was also not, as often thought, used by the ‘father of communism,’ Karl Marx who wrote about capital, and did refer to the owners of capital as capitalists and the workers as proletarians.

Although it is not clear who used the word in its current, systemic context first, it was coined and introduced into the economic - and general - discourse by Werner Sombart with his 1906 classic work, Modern Capitalism.

Where did it all start?

It all started with the Late Latin word capitale, from caput," and from proto-Indo-European kaput, which means "head". It is also the origin of chattel and cattle in the sense of movable property.

Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money or money carrying interest. By 1283, it was used in the sense of the capital assets of a trading firm and it was frequently interchanged with a number of other words – wealth, money, funds, goods, assets, property and so on.

However, the word’s roots remain in the trade and ownership of animals, being how wealth was measured. The more heads of cattle, the richer.

This lexical connection between animal trade and economics can also be seen in the names of many currencies and words about money: fee (faihu), rupee (rupya), buck (a deerskin), pecuniary (pecu), stock (livestock), and peso (pecu or pashu) all derive from animal-trade origins.

Final word

Probably the best-known champion of the idea that capitalism promotes political freedom, Milton Friedman, argues that competitive capitalism allows economic and political power to be separate, ensuring that they do not clash with one another.

Recent revelations globally, and especially in South Africa, seems to suggest the opposite. Capitalism’s ‘animal instincts’ rather seems to enable it, in whichever political environments it finds itself, to find the means to manipulate that environment to its own advantage.

The real challenge is to empower democracy sufficiently via institutions like the judiciary and strong enough sanctions, to counter balance the power of capitalism.

by Piet Coetzer

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Final Word

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