Capitalism defies the laws of physics

How long have we had capitalism? In its modern form, in the UK, less than 200 years. According to Karl Polanyi, capitalism started in Britain in 1838, with the introduction of the Poor Laws. It was these laws which finally lead to the commodification of labour, a necessary condition for capitalism.

The title of this post is slightly flippant but the point is this; because capitalism has existed as an economic system for nearly two centuries people think it is inevitable - like the laws of physics. Of course, capitalists would like you to think this, and since it's the only economic system you have ever known it's not surprising if you do. But capitalism isn't like gravity. It is neither inevitable nor necessary. It exists because the conditions it requires to function have been manufactured and are maintained. In other words the rules are set to enable capitalism to function - through legislation. In his book, The Great Transformation (an essential read if you want to know how capitalism came about) , Polanyi focussed on three key conditions; the commodification of land, labour and money. There is no reason why any of these things should be commodities, and they weren't in the past.

Lets take money as an example. Money can be simply a means of exchange. There is no particular reason why it should be a commodity in itself. There is no need for people to be able to buy and sell money. Neither does labour need to be a commodity. Because it is a commodity, workers need to sell their labour to capitalists in order to survive - work or starve. But before the commodification of labour, 'workers' (who at that time were not workers in the modern capitalist sense) had no need to sell their labour because they had alternatives, including access to land to grow food and have a measure of self-sufficiency. Of course, they could choose to sell their labour if they wanted to, and often did. The point is they were not forced to sell it as they are now. Part of the process of forcing 'workers' to sell their labour was the enclosures of common land - essential to the process of commodification of labour.

The idea of 'workers' being able not to have to sell their labour is simply unacceptable to capitalists. If you and I were able to choose freely to work for others when we felt like it, because we had a large measure of independence, it is very easy to see that capitalism couldn't work. We therefore have to be forced to do it. And that is what happened in the 18th and 19th centuries here in the UK.

It is clear, therefore, that socialists must end the commodification of land, labour and money. This is what happened in the Soviet Union. However, the mistake the Communist party made was to put everything into the ownership of the state, on the basis that it was 'owned' by all. This didn't work, as we know, because of the lack of democracy and the dictatorship which was established by Josef Stalin. Land, for example needs to be put into common ownership, not state ownership, as some of it was here before the enclosures. Naturally, there are some people who cannot conceive of how that collective ownership could work - but the point is that it did work then - and there is no reason why it could not work again.

Capitalism is not inevitable - it was created, and we can choose democratically to change the rules to create a more equitable society in which people are freer and not dependent on the whims of the capitalist system. When the rules have been changed capitalism will melt away like the snow did last week.

Please note that this post needs read within the wider context of previous posts such as this one and this.