Myths of Capitalism

The Wondrous Free Market

Free market! Free market! The market will sort it out. Free market! Free market! It’s the free market at work. Like a drunk hollering ‘Free Bird’ at whatever band is on stage, a capitalist flunky will undoubtedly use the words free and/or market in whatever argument is had, – as if its an a priori answer to any problem. How does this free market form? What is it? Is it just trading free from government/state interference? Or is it a supra-rational being built up from the many individual transactions carried out daily; exchanging information between separate entities and amalgamating into a super intelligent ‘invisible hand’ – akin to Captain Planet being summoned (probably by everyone uttering free market in unison) to sort the world out?

A lot of sentiments on capitalism is that is it a mode of production outside of governmental control and will emerge naturally without it; is sustainable and doesn’t need state oversight to be profitable.Some think that the capitalist system is the sole instigator and producer of wealth and that market forces (people buying and selling goods/servcies) will regulate itself without outside force1. It is also assumed that due to it being the wealth creation force, that all governmental activity is sustained by capitalism in the form of taxation, so without capitalism government couldn’t exist.

This is an inversion of the actual relation between government and capital. Indeed forms of government and nation states came well before capitalism. The conditions for capitalism to thrive were helped by policies enacted by the state throughout history. I will explore the formation of capitalism and the role of the state, as well as the history of state intervention in the continued progression of capitalist ideals and the current function of the state in maintaining the capitalist systems. I’ll also look into the notion of a ‘market’ existing and how a supra-rational being could emerge from the participants in the system just buying and selling things. I’ll condense each section into separate parts to ensure your noggin can process the information without resorting to stimulants to keep concentration.

Introduction

Myth: Capital is Well-Defined

Myth: Barter

Monetary system

Myth: Rational Actors

Part 1: No state intervention in formation

Along with profit never being realised without enough money in circulation, which has been chiefly designated by states [Monetary System], the history of capitalism shows how the state influenced and coerced people to align with the capitalist beliefs once it emerged. Before capitalism arose, throughout Europe, there was feudalism and manorialism2. Manorialism was characterised by …

Part 2: Hand-in-hand with the state for the disciples

The formation of capitalism and the attitudes of various governments towards it were heavily influenced by economists of the time, such as Adam Smith, Ricardo and the Physiocrats1. Politicians and business leaders found in their doctrines a source of inspiration to disentangle industrial life from political interference. The notion was widespread that any disadvantages to …

Part 3: Neoliberal free-market fundamentalism

Over the last 50 years, Neoliberalism in both propaganda and bureaucratic circles has taken helm of the capitalist faith. Its an ideology that is a resurgence of 19th-century ideas associated with laissez-faire economic liberalism and free market capitalism. You would think that with these ideals, that nowadays the governments of the world use a light …

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