Free Markets

[Redistribute the Rep]

Has anybody else noticed the people who think that capitalism = free markets? A monopoly, for example, would not be considered capitalist according to these folks. I'm really confused here, what causes these people to think this? And how do you deal with these people?

[exeexe]

if the monopoly is created through law, then you distort the supply. And free market is defined with supply and demand. So if you get an artificial supply, you cant talk about a free market.

The service the police is trying to deliver is a form of monopoly that is created through law.

[Redistribute the Rep]

I mean it's the word capitalism that these people are confused about they think if it's not a free market then it isn't capitalism

[exeexe]

well you could tell them that a one-man show. 1 man owning a shop and running it isnt capitalistic but he still operates on the free market

[MarcusJuniusBrutus]

Yes, people in the USA seem to think that capitalism and free market are synonymous. They are not, and anyway, free markets do not exist. Capitalism is the concentration of the means of production into the hands of originally an industrial and now financial elite. Free Market is more of a pre-modern market model with supply and demand setting prices. The modern model creates a need with saturation advertising and other cultural manipulations. While this may be different in degree to the bizarre barkers, it is enough of a degree to be qualitative. Anyway, that market was never really free since it depended on local power structures to be relatively free from violence and theft. Later, the state regulated weights and measures, created roads, tested for quality, and fixed the value of money to promote trade. Further, since most villages did in fact have monopolies on certain products and services--mills, ironmongers, barbers, or whatever--there often were regulations--often just customary--on what the merchant could charge.

But yeah, there is nothing "free market" about capitalism.

[Sea]

Monopoly is the direct result of a free market. Free market means that the market economy is allowed to develop on its own accord, not that there is freedom for anyone involved. Freedom doesn't exist!

Everyone but me is wrong. Not only are the two compatible, one follows directly from the development of the other.

[The Ben G]

A monopoly doesn't need a free market or capitalism to exist. A company, a state or an individual can be a monopoly. It simply matters who controls the supply of goods to the public, whether in a communal or capitalist society.

[tuwix]

Has anybody else noticed the people who think that capitalism = free markets? A monopoly, for example, would not be considered capitalist according to these folks. I'm really confused here, what causes these people to think this? And how do you deal with these people?

There is nothing left beside proving that free market doesn't exist, never has and never will. Free market is just an economic model which assumes no intervention in market beside supply and demand. It's impossible. Always someone or something will intervene. State, mafia, natural disaster or whatever.

Assumption that monopoly is an effect of state interventionism is another lie due to assumption of perfect competition (https://en.wikipedia.org/wiki/Perfect_competition). But perfect competition doesn't exist.

Certainly your prove will change nothing in their opinions because they are just cult. They likely believers of free market cult.

[ralfy]

From what I know, there are different types of capitalist systems, include state capitalism. Free market capitalism, however, creates greater volatility.

[Comrade #138672]

These people are often right-wing libertarians, who recognize the monstrosity of the system, but refuse to acknowledge that it is capitalism because it is in contradiction with their free market ideology. It is a rhetorical move, which enables the libertarian to relieve themselves of the burden of defending capitalism as it actually is.

[Anglo-Saxon Philistine]

1 man owning a shop and running it isnt capitalistic

Sure it is.

[Fegelnator]

Has anybody else noticed the people who think that capitalism = free markets? A monopoly, for example, would not be considered capitalist according to these folks. I'm really confused here, what causes these people to think this? And how do you deal with these people?

A quick introduction to subsidies, tariffs, monopolies, top-down intervention, corporate taxes, corporations and patents should do the trick. You could back it up with info on market misinformation and the statement that even something small like a minimum wage distorts markets.

Free markets have never existed.

[exeexe]

Sure it is.
The number of workers being exploited is exactly 0 so its not capitalism since in capitalism you exploit workers and thats why you want to abolish capitalism

[Anglo-Saxon Philistine]

The number of workers being exploited is exactly 0 so its not capitalism since in capitalism you exploit workers and thats why you want to abolish capitalism

Capitalism is a mode of production - so, first of all, it applies to the entire society, not individual enterprises - that is based on the private ownership of the means of production. One-man shops operate like this as well.

[exeexe]

Capitalism is a mode of production - so, first of all, it applies to the entire society, not individual enterprises{

Wrong mode of production takes place exactly where you produce stuff, that would be factory, company, restaurants etc

Not everything en between, like supportive institutions like schools, roads, police, government etc.

If capitalism would apply to society it would apply to the supportive institutions too but it doesnt. Its only where you produce stuff.

So if it only applies to where you produce and not in the entire society it allows a one-man shop to be excluded from capitalism. The question is then does it do that?



- that is based on the private ownership of the means of production. One-man shops operate like this as well.Yes there is private ownership of the production but there is no proletariat who only can sell his labor.

Anyways to say that a one man show is capitalist because he has private ownership of production is the same as saying that a union of workers owning some machines in a corporative is capitalist just because society around this corporative operates in a capitalist fashion.

Edit:
whatever

[Anglo-Saxon Philistine]

Wrong mode of production takes place exactly where you produce stuff, that would be factory, company, restaurants etc

That is not how Marxists use the term. To quote Mandel, who for all his faults was one of the great Marxists economists of the past century:

"In summary, the capitalist mode of production is a regime in which the means of production have become a monopoly in the hands of a social class and in which the producers, separated from these means of production, are free but are deprived of all means of subsistence and consequently must sell their labor-power to the owners of these means of production in order to subsist."

(from "An Introduction to Marxist Economy");

and:

"Every socio-economic formation is characterized by a particular set of relations of production. This applies not only to the great historical periods of human history, called modes of production (primitive communism, slave-owning society, the ancient Asiatic mode of production, feudalism, capitalism, communism), but to each particular social formation, in each phase of its development. To deny that a particular social formation has production relations specific to it would be to deny a basic principle of historical materialism. "

(from "Ten Theses").


Not everything en between, like supportive institutions like schools, roads, police, government etc.

If capitalism would apply to society it would apply to the supportive institutions too but it doesnt. Its only where you produce stuff.

It does. The state apparatus of a feudal society is not the same thing as the state apparatus of a bourgeois one; from this follows the necessity of smashing the existing bourgeois state apparatus instead of using it "for our own ends" as Bernstein imagined.



Anyways to say that a one man show is capitalist because he has private ownership of production is the same as saying that a union of workers owning some machines in a corporative is capitalist just because society around this corporative operates in a capitalist fashion.

I assume you had meant to say "cooperative". And yes, indeed cooperatives are also an example of capitalist enterprise.

[exeexe]

I think the question of this discussion is not what mode of production is, but what capitalism is. Since you are saying that a cooperation of workers are capitalist i think its here we need to put our focus.

Well i found this quote and i dont know where to begin so i just quote the whole god damm thing. Its noteworthy that this quote will tell you that Mandel (never heard of him) failed to understand what the essence of capitalism is.


Near the end of Capital Marx outlines the full significance of the difference between modes of exploitation:
The specific economic form in which unpaid surplus labor is pumped out of the direct producers determines the relationship of rulers and ruled, as it grows directly out of production itself and in turn reacts upon it as a determinant. But on it is based the entire formation of the economic community growing out of the productive relations themselves, and therewith its specific political form likewise.
It is always the direct relationship of the owners of the conditions of production to the direct producers – a relationship whose actual form always naturally corresponds to a definite stage of development in the ways and means of labor and hence its social productive power – which reveals the innermost secret, the hidden foundation of the entire social structure and hence also of the political form of the sovereignty-dependency relationship – in short, of the specific form of the state in each case.
This does not gainsay the fact that, due to innumerable different empirical circumstances (natural conditions, racial relations, outside historical influences, etc.), the same economic basis – the same in terms of the main conditions – can show infinite variations and gradations in the phenomenon, which can be grasped only by analyzing these empirically given circumstances.(3) (http://www.lrp-cofi.org/book/chapter1_notes.html#note3)
This masterful summation expresses the inescapable bond linking the form of exploitation, the social structure and the state. Applied to capitalism, it means that the wage-labor relation is the foundation of the bourgeois state. It notes further that this state and its accompanying social structure can take many different forms (“infinite variations and gradations in appearance”). Nevertheless, all will be capitalist (“the same economic base ... with regard to its principal conditions”), as long as the surplus labor is extracted through wage labor – which means that the surplus product takes the form of surplus value.
Well known though this passage is, it is all too often misrepresented. When Marx writes of the “specific economic form in which surplus labor is pumped out,” Marxist experts do not see that he is referring to the method of exploitation. Ernest Mandel, for example, interprets the passage as a refutation of the claim (by Milovan Djilas) that the USSR is state capitalist, since capitalism and Stalinism appear to have different ways of extracting surplus product:
For what is the form of appropriation specific to capitalism? Does this form still exist in the Soviet Union? Under capitalism, the surplus social product is appropriated by the owning class in the form of money following the sale of merchandise. In the USSR the surplus product is appropriated by the state in the form of merchandise through the realization of the plan; the financial bankruptcy of enterprises (which sometimes takes place in the USSR) has no effect either on this appropriation, or on accumulation.(4) (http://www.lrp-cofi.org/book/chapter1_notes.html#note4)
Whereas for Marx the form of surplus extraction means the mode of exploitation – that is, the relation between the ruling and producing classes – for Mandel it means only the superficial form taken by the surplus once it has been extracted: whether it is money or not. Mandel says that the essence of capitalism is “generalized commodity production,” which he recognizes only through the sale of merchandise for cash. But although capitalism is commodity production, the exchange of its products for money is only its appearance. Its essence is wage-labor exploitation.
http://www.lrp-cofi.org/book/chapter1_1.html

So if there is no wage labor exploitation, as we see in a cooperation it can not be classified as capitalist and the same goes for a one man show

[Anglo-Saxon Philistine]

Read the quote again. The LRP author (Daum, I think) is still talking about capitalism as a mode of production that applies to the entire society - in opposition to Mandel, however (and I think Mandel is right in this case), they view capitalism as defined by generalised (since of course wage-labour existed before capitalism) wage labour.

Cooperatives, of course, also extract surplus value indirectly, from the neo-colonies, from other workers, from unpaid domestic labour etc.

[Ceallach_the_Witch]

if I remember correctly the Free Market is a magical creature which would act as a universal panacea for absolutely everything were it to exist, using its omnipresent invisible hand to intervene in situations for the greater good.

It's rather like a substitute for the Christian God for people who prefer profit to the milk of human kindness and fire and brimstone.

On paper, it's a rather nice idea - but it'd never work in practise and every attempt to implement it has resulted in horrible suffering.

[exeexe]

Cooperatives, of course, also extract surplus value indirectly, from the neo-colonies, from other workers, from unpaid domestic labour etc.
Not necessarily. Lets say you have a cooperation in Malawi one of the least developed countries in the world (its an LDC)..
Then, from where should this cooperation exploit workers?

[Anglo-Saxon Philistine]

Not necessarily. Lets say you have a cooperation in Malawi one of the least developed countries in the world (its an LDC)..
Then, from where should this cooperation exploit workers?

From other sectors of the economy. And the male workers of the cooperative would rely on the unpaid domestic labour of their partners and family.

This is one of the iron laws of the capitalist mode of production - if the rate of profit, determined by the extent to which surplus value is extracted from the direct producers, associated with an economic unit goes down sufficiently, the economic unit in question is ejected from the market.

People who think cooperatives are "socialist", from the international secretary of the bureaucratically-degenerated Fourth International to the marshal-president of Yugoslavia and the rightful King of Spain, are at best opportunists and reformists.

[Five Year Plan]

I think the question of this discussion is not what mode of production is, but what capitalism is. Since you are saying that a cooperation of workers are capitalist i think its here we need to put our focus.

Well i found this quote and i dont know where to begin so i just quote the whole god damm thing. Its noteworthy that this quote will tell you that Mandel (never heard of him) failed to understand what the essence of capitalism is.
http://www.lrp-cofi.org/book/chapter1_1.html

So if there is no wage labor exploitation, as we see in a cooperation it can not be classified as capitalist and the same goes for a one man show

That is an extremely bad misreading of the quote. Daum is making the point that the inner essence of capitalism is the systematized compulsion to extract the maximum amount of surplus through commodity exchange. This compulsion, in which concrete labor is treated as abstract, is the wage relation.

Daum is arguing against people like Mandel who argue that the absence of privately owned (bourgeois) property meant that capitalism couldn't exist, suggesting that Mandel is confusing form with essence, with Daum arguing that bourgeois private property was only one form that the inner essence of capitalism (defined above) can take.

It doesn't matter that the person who is performing abstract labor and receiving the wage also happens to be the capitalist who owns the productive property.

Vincent is correct to suggest that a petty producer within a framework of generalized commodity production is a small capitalist who also performs his own wage labor. As such he is both capitalist and laborer, and a member of the middle class. He is operating within the capitalist mode of production. A petty producer in feudal society, however, is not a capitalist. He is a freeholder who doesn't produce commodities.