Myths of Capitalism

Private Property

Capitalists tend to hold private property rights above all others and proclaim its sanctity in economic thought1. Like a lot of the myths of capitalism, this ideal is only sacred if you discount the whole history of capitalism and tends to only apply to the owning classes, not other peoples.

What can be considered ‘private property’? The liberal conception of this likely comes from the old Roman-based legal system terms – usus, fructus and abusus2-5. This legal concept developed in Roman law and found significant application in the determination of the property interests between a slave held under a usus fructus (Latin: “use and enjoyment”) bond and a temporary master. Any property acquired by a slave as a result of his labour legally belonged to that master.

Usus: refers to the right to use something directly without damaging or altering it.

Fructus: refers to the right to enjoy the fruits of the property being used – that is, to profit from the real property by leasing it, selling crops produced by it, charging admission to it, or similar.

Abusus: refers to the right to consume, destroy, or transfer ownership of property to someone else.

It is this final right, abusus, which legally denotes private property in many systems of law. A usufructuary does not have full ownership of the property, because they do not enjoy the third property right. The legal frameworks developed by states and peoples tend to follow on from these distinctions and can include such terms as de jure6, de facto and dominium7. For example, in England, property law encompasses four main topics:

  • English land law, or the law of “real property”
  • English trusts law
  • English personal property law
  • United Kingdom intellectual property law

Generally private property9 is a legal concept defined and enforced by a country’s political system and designates for the ownership of property by non-governmental legal entities. Prior to the 18th century, private property usually referred to land ownership. In civil law systems, personal property10 is often called movable property or movables – any property that can be moved from one location to another. Personal property can be understood in comparison to real estate, immovable property or real property (such as land and buildings).

Bourgeoisie ideas formed from the burghers11,12 (town people, often merchants) of medieval times and subsequently the commonalty13, whereby humans recognised like-minded individuals as the people in occupancy of these property rights. Lords used to regularly steal from merchants and thus the power of kings came from overseeing the diminishing in this, to the benefit of the bourgeoisie. People who they viewed as beneath them, like slaves or the peasantry, would not hold these rights. Hence the fruits of the labour of wage employees would be controlled by the merchants/bourgeoisie14 that made-up the contracts of employment. The Enclosure Acts stole land that was deemed private property (from copyholders and usufruct of communal property, where peasants could graze their cattle and provide themselves with wood, turf, etc… for heating) in the feudal set up. This ensured there was a substantial amount of former peasants who could be used as waged labour. The situation led to the mechanisms of the accumulation of capital and capitalism as a system fully evolved.

A combination of the old aristocracy via the state and the bourgeoisie then set about stealing from others and pronounce ‘This is mine’, leading to many imperialist and colonialist wars and occupations. This has continued throughout history and into the present day. Like all pious ideologies, if a person whole-heartedly takes on board the bourgeoisie mindset, then they can be considered a part of their kin and all associated rights can fall into their lap.

As the bourgeoisie morphed into economic liberals, they utilised state powers to mould society into what they wanted. The hypocritical nature of property laws are then embedded into society, whereby theft of resources is wrong, unless it’s done via a contract, under the protection of the state or via the market place. Basically everything is fair game, if you have the legal representation. Or military might. There may be sections of capitalists that abide by the rules and believe in the liberal dream but a large portion know that the law can be bought and amended as they see fit. Lobbying is one of the main devices used for this.

Economic liberalism has also managed to make its position impregnable: on the one hand, by means of a moral theory, determined by interest and a quasi-theology governing its own system of regulation; on the other, by claiming to be a science based on the exclusion of any morality not based on the premise that only private interest is rational15. Standard economic thinking supplants the commons with people as seemingly free-floating individuals and feeds fear by instructing that we’re all in a race to compete for limited resources. Over generations, open theft of common heritage and resources became disguised as private property, hiding behind legal contracts and the cold fiction of money as wealth. This can lead to excluding, individualising, destroying, alienating and, in consequence, undermining the innate creativity and resilience of a necessarily complex system of interaction – between human and human, and between human and nature16.

USA imperialism (starting with their policy/belief of Manifest Destiny17,18) is a continuation of the capitalist urge to steal property, kill resistors and ‘enclose’ it via bourgeoisie laws. Whenever a group of people are deemed to have resources that the think they can obtain and profit on (usually from nations without a substantial military resistant threat), then the mechanisms of the military industrial complex comes into effect19-23. Propaganda, think-tanks24 and current property relations ensures there are a continuous line of willing participants, ready to be sacrificed for the cause of resource accumulation for the progeny of the bourgeoisie25,26.

The disregard to private property rights often comes to light whenever a smaller company has the audacity to claim some sort of property before a larger company has the chance. Large companies will try to make legal cases as expensive as possible for smaller companies, with the notion that the smaller company might be forced into bankruptcy rather than fight for the registration of a trademark/copyright27-29. The whole realm of intellectual property rights tends to favour whoever can muster the resources for good legal representation and not necessarily whoever has the ideas first3034.

A host of companies do not adhere to the private property regulations and regularly try to steal information and ideas that may benefit them, knowing there are little repercussions if found35. Some of Britain’s most respected industries routinely employ criminals to hack and steal personal information on business rivals and members of the public. The biggest companies are also suspected of stealing competitor’s products to cement their strange-hold of the market – although Amazon has denied that they steal third-party seller information to better compete in their own marketplace36-38. The parasitic nature of capitalism’s ability to think of all social production as under the ownership of business people is exemplified in the following example: in the midst of the COVID19 crisis, corporations are preparing to sue states over pandemic measures to save lives39.

Another way in which the players of capitalism ignore contractual property relations is by wage theft. This kind of theft is considered a civil matter, even though it dwarfs every other type of (property) thievery in existence – making up to 75% of all theft40-44. In the United States in 2012, there were 292,074 robberies of all kinds, including bank robberies, residential robberies, convenience store and gas station robberies, and street robberies. The total value of the property taken in those crimes was $341 million, the total amount recovered for the victims of wage theft in the same year was $933 million. Obviously, this is only the tip of the iceberg, since most victims never sue and never complain to the government. This is on top of trillions of dollars of workers’ wages each year being syphoned off surplus labour by not keeping up with increases in productivity45. As long as capitalism has existed, its main mode of being has been in neglecting to pay wages in line with the value that labour has produced.

Libertarians (right-wing) often go to great lengths in trying to shoe-horn their beliefs that property is fundamental to civilised society. Though they can never resolve the basic issue that property acquisition violates the liberty of others46. They often overlook the long history of examination into property and fabricate a belief system based on one particular right.

Proudhon’s ‘What is property?’47 is one such piece of work, using jurisprudence and mathematics to analyse rights and in particular property (in opposition to individual possessions), noting:

‘If I show that property itself is impossible — that it is property which is a contradiction, a chimera, a utopia; and if I show it no longer by metaphysics and jurisprudence, but by figures, equations, and calculations, — imagine the fright of the astounded proprietor!

Property is physically and mathematically impossible…

Axiom. — Property is the Right of Increase claimed by the Proprietor over anything which he has stamped as his own. Property is the right of increase.’

Using these terms – that property is the right to increase (rent/usury/profits) an argument follows:

‘1. The amount of increase is proportional to the thing increased. Whatever be the rate of interest,whether it rise to three, five, or ten per cent., or fall to one-half, one-fourth, one-tenth, — it does not matter; the law of increase remains the same. The law is as follows: —

All capital — the cash value of which can be estimated — may be considered as a term in an arithmetical series which progresses in the ratio of one hundred, and the revenue yielded by this capital as the corresponding term of another arithmetical series which progresses in a ratio equal to the rate of interest.

Observation. — The forms of increase known as farm-rent, income, and interest are paid annually; rent is paid by the week, the month, or the year; profits and gains are paid at the time of exchange. Thus, the amount of increase is proportional both to the thing increased, and the time during which it increases; in other words, usury grows like a cancer — foenus serpit sicut cancer.

2. The increase paid to the proprietor by the occupant is a dead loss to the latter.

3. The right of increase oppresses the proprietor as well as the stranger. The master of a thing, as its proprietor, levies a tax for the use of his property upon himself as its possessor, equal to that which he would receive from a third party; so that capital bears interest in the hands of the capitalist, as well as in those of the borrower and the commandité. ‘

With these observations, Proudhon then declares property to be impossible as a viable perpetual concept via the propositions:

‘First Proposition. Property is impossible, because it demands Something for Nothing…

Second Proposition. Property is impossible because wherever it exists Production costs more than it is worth…

Third Proposition. Property is impossible, because, with a given capital, Production is proportional to labor, not to property…

Fourth Proposition. Property is impossible, because it is Homicide…

Fifth Proposition. Property is impossible, because, if it exists, Society devours itself…

Sixth Proposition. Property is impossible, because it is the Mother of Tyranny…

Seventh Proposition. Property is impossible, because, in consuming its Receipts, it loses them; in hoarding them, it nullifies them; and in using them as Capital, it turns them against Production…

Eighth Proposition. Property is impossible, because its power of Accumulation is infinite, and is exercised only over finite quantities…

Ninth Proposition. Property is impossible, because it is powerless against Property…

Tenth Proposition. Property is impossible, because it is the Negation of equality…’.

The sanctity of private property in a population can lead to landlordism48-50, where unproductive members of society can claim rent on pieces of land and houses from the productive members of society, as tenants. Throughout history industrial capitalists/politicians, like Winston Churchill51, and economists, like John Maynard Keynes52, have been critical of landlords as the process of rent extraction leads to a shortage of money being diverted and invested into industrial capacity. The rentier classes53-55 are antagonistic to the supposed productive forces of capitalism and derive their passive incomes not from their own labour or enterprise but from rent extraction. Michael Hudson56 notes the similarity between feudalism and its charging of economic rent and the strands of the financial sector that embraces landlordism. Like any parasite that over-consumes, this tends towards total annihilation of the financial system.

Capitalists have a tendency to be focused on the accumulation of property and profits, then disregard externalities to the production system, that will have to be paid one way or another – unpriced natural capital. ‘Natural capital’ refers to ecological materials and services like clean water or a stable atmosphere; ‘unpriced’ means that businesses don’t pay to consume them57. Environmental consultancy Trucost, on behalf of The Economics of Ecosystems and Biodiversity (TEEB – now known as the Natural Capital Coalition) program produced a report58 to tally up the total unpriced natural capital consumed by the world’s top industrial sectors. The total unpriced natural capital consumed by the more than 1,000 global primary production and primary processing region-sectors amounts to $7.3 trillion a year — 13 percent of 2009 global GDP. Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated.

The privatisation of property for proprietors doesn’t go hand-in-hand with any responsibility of the effects of using the property in the capitalist system; even when the effects do have a monetary consequence59 for the rest of society. A 2008 systematic review60 of the total societal costs of air pollution, it was estimated that the direct medical costs for the US alone are in the range of $40 billion per year, with additional intangible costs of around $5 billion per year. A recent analysis estimates the total societal cost for air pollution in the US in 2011 to have been $131 billion (down from $175 billion in 2002)61.

At its heart, property is exclusion – of beings from resources, once just land then encompassing all tools and means of production. Exclusion enforced by violence and coercive laws. Often no ususfruct is given to people designated as the ‘other’ and all is held by a minority of individuals. Might is right and dressed up then rationalised as reasonable property doctrine. Like the state beforehand, capital tried to envelop the entirety of production into its domain, with any surplus taken out by proprietors. ‘This is mine’ – to everything in existence. All energy diverted into feeding the cancerous growth that devours and kills the living organism.

Introduction

Barter Myth

Myth: Capital is Well-Defined

Monetary System

Free Market Fairy Tale

Rational Actors

No Alternative