Actually, here. Lets have this conversation - how would you define Capitalism? A particular kind of market economy, any market economy, a culture, an ideology...? :/

@Angle Pulling a lot of this together, my /own/ synthesis is that "capitalism" is a system in which the primary determinant of economic production and productivity is given to be capital. That is, productive output reserved and utilised for production itself.

That's as opposed to other factors of production being considered most significant: labour (as with Marxists), natural resources (ecological economics), energy (thermoeconomics), the ideological hash of Libertarianism, ....

10/

@dredmorbius @Angle

"capital. That is, productive output reserved and utilised for production itself."

See, that's what I *don't* think 'capital' actually is in modern capitalism.

Perhaps to an economist this definition is correct? But that's why economists look foolish to most people. They build very clever models which do not actually connect with reality.

In our society, I believe, capital is a measure of *ownership and control*, often of something not productive or even *real*.

@Angle @dredmorbius

Eg: capital, as it actually exists and is deployed in our culture, is not any kind of physical 'productive capacity'. It's literally debt.

A venture capitalist comes in to an established business, and the only thing they bring is *capital* - ie, money, in the form of loans, with a corresponding debt.

With this capital the business can command the production of *others*... but it also requires them to produce for the VC, not things, but *money*.

@dredmorbius @Angle

So increasingly, capital in our culture is not *producing* things of real value but growing itself by *consolidating ownership and control*.

Our abstract form of tradable 'capital' may even grow by shutting down productive capacity: closing factories, outsourcing jobs, reducing living standards.

Housing is a great example. If a house doubles in price, it's called a 'capital gain', yet zero real productive capacity has increased. A number has gone up, that's all.

@Angle @dredmorbius Yet this function of the thing we call 'capital', of growing itself by consolidating control rather than increasing productive capacity, is nothing particularly new. It's been there a very long time.

So I'd say that capitalism is a system based on capital, a tradable *proxy for* real productive ecological, industrial and social capacity, and which is very often mistaken for the real thing. And it's actually a measure of *exclusion* of access to and control of resources.

@dredmorbius @Angle This is because control over a thing requires the ability to exclude others from that thing.

So capital is a tradable commodity that *claims to represent* real productive and generative wealth, but *actually is* a means of excluding people without capital from that wealth. As capital grows, naturally forms of control-by-exclusion grow, because again, that's what capital fundamentally is and seeks to grow. A freely provided good has no tradable value (but IS great wealth).

@Angle @dredmorbius So there are two great errors here that form a large part of the terrible social and ecological hurt done by capitalism, the social form that respects capital and seeks to grow it above all else:

(and societies can be more or less capitalist than others; 100% capitalist is Libertarian, where even law and justice require money)

1. Mistaking a proxy of a thing, which can often be its opposite (control and exclusion) for the thing itself (production of real wealth)

@dredmorbius @Angle

And 2. That thing, capital, the *proxy* for wealth-generation, *itself* grows, ie the more control-by-exclusion you have, the more you can control and exclude others.

So its both 1) a system which is dangerously self-deceived about the true sources of wealth - a deception that 'works' only when there's lots of free productive capacity (ecology, labour) and just *capturing* a chunk of that capacity looks like *creating* capacity

2) a system that consumes itself via growth

@Angle @dredmorbius

Now it may well be that the economists' definition of capital ("productive capacity used to produce more capacity") does in fact exist.

But since it's almost always exclusively measured in terms of ownership and *control* of that capacity - where merely *controlling* production doesn't mean creatively directing it but simply skimming off the 'profit' for yourself - then it's still measuring the proxy, not the real thing.

I think we need a new word for 'real capital'.

@dredmorbius @Angle The other thing is that the new thing about 'capitalism' (I mean new in terms of becoming the dominant mode of European society 500 years or so ago, though it's probably much older)

Is the idea of 'tradable ownership' of productive capacity.

I think that's what's at the root of what we *call* capitalism, as opposed to monarchism, etc.

It's that you can have lots of people all owning chunks of 'real capital' (or what they THINK is real capital - see tulips).

@Angle @dredmorbius So where as before you could have a monarch/emperor and all his/her feudal lords and officers owning all the land, trade routes, and other capital-like stuff... under capitalism, you can have complex and rapidly ever-changing systems of that ownership. Eg joint-stock companies. It let capitalism evolve fast.

But I think that also means that 'ownership of nominal capital' becomes even MORE abstract and removed from 'creatively directing the production of real wealth'.

@dredmorbius @Angle Like maybe an emperor in another country wasn't SUPER good at actually giving good instructions to his regional lords and making trade safe, but at least he was hopefully a bit aware that that was his job and doing it well was the source of his wealth.

But if you just own a share in Apple? Especially if you're only owning it for 30 milliseconds, just to flick it on to someone else? That really means you understand how to run Apple? Or are you just being an algorithm now?

@Angle @dredmorbius And again, this probably has always been the case since ancient times. Just owning land didn't mean you were necessarily using it productively. and just winning a war with your neighbours and taking their land didn't mean you are therefore a more moral and efficient kingdom and more entitled to manage that land.

(though no doubt that was exactly the argument made, and still is)

So maybe it's not 'capital' so much as 'mistaking control for real wealth' that's our problem?

@dredmorbius @Angle Oh, and the final other twist, which again has probably been there since the Nile salt plains flooded but is especially urgent post-WW2?

You can do things, lots of clever things, that in the short term and locally 'increase productive capacity' but in the long term and far away actively DESTROY productive capacity.

Pollution, CO2, species extinction, shredding the social fabric. All these are HUGE net planetary 'capital losses' but marked up financially as 'capital gains'.

@natecull @Angle So, /that/ is another very central point to the like of argument and explanation I've been building up.

Part of this is pretty much from today:

Raw materials, land, energy fluxes, capital, etc., all represent forms of /potential/. Potential /isn't/ wealth, but it can /become/ wealth. Potential may be used in any of multiple ways, but once you've committed to one use, it generally costs you /more/ to revert it to another than if you were starting fresh. So: path dependencies.