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5 Capitalism and imperialism
J.A. Hobson, a British liberal writing at the time of the fierce debate on imperialism during the Boer War, observed the spectacle of the Scramble for Africa and emphasized changes in European social structures and attitudes as well as capital flow, though his emphasis on the latter seems to have been the most influential and provocative. His so-called accumulation theory suggested that that capitalism suffered from under-consumption due the rise of monopoly capitalism and the resultant concentration of wealth in fewer hands, which apparently gave rise to a misdistribution of purchasing power. This argument calls attention to Europe's huge, impoverished industrial working class, which was typically far too poor to consume the goods produced by an industrialized economy. His analysis of capital flight and the rise of mammoth cartels later influenced Lenin in his book Imperialism: The Highest Stage of Capitalism, which has become a basis for the neo-Marxist analysis of imperialism.
Contemporary World-Systems theorist Immanuel Wallerstein perhaps better addresses Hobson's counterarguments without degrading Hobson's underlying inferences. Wallerstein's conception of imperialism as a part of a general, gradual extension of capital investment from the center of the industrial countries to an overseas periphery thus coincides with Hobson's. According to Wallerstein, Mercantilism became the major tool of semi-peripheral, newly industrialized countries such as Germany, France, Italy, and Belgium. Wallerstein hence perceives formal empire as performing a function analogous to that of the mercantilist drives of the late seventeenth and eighteenth centuries in England and France. The expansion of the Industrial Revolution hence contributed to the emergence of an era of aggressive national rivalry, leading to the late nineteenth century scramble for Africa and formal empire.
6 Capitalism as an ideology
As with many common words, and most particularly ideologically laden words, "capitalism" has many meanings. There can be great confusion amongst these meanings, and readers must be careful of which meaning a writer intends in any particular usage.
"Capitalism" as a phenomenon external to our perceptions of it (the system of the private ownership of capital goods) is certainly different from "capitalism" as an ideology (the philosophical advocacy of that system). Of course, the precise ideology meant by "capitalism" in the latter sense differs: what a Marxist or Green may describe as capitalist ideology may seem thoroughly alien to what a classical liberal means by calling her- or himself a capitalist, and vice versa.
Some argue that capitalism as a system and capitalism as an ideology go hand in hand. This view is often founded upon the Marxist idea that ideology is largely a consequence of underlying economic realities -- or the simplification of that idea which holds that people favor ideologies which justify their behavior or privilege.
Whether capitalism is (as Marx held) the natural ideology of the class of business owners (capitalists) is itself controversial, though. Business corporations have frequently favored forms of mercantilism, under which the state supports domestic business against foreign interests. Mercantilism is sometimes identified as a form of capitalism, and sometimes not. Modern Japanese capitalism after World War II might be seen as capitalist mercantilism, while the European mercantilism of the period before 1600 or so has been seen by some economic historians as being pre-capitalist. Further, Austrian school economists regard mercantilist policies as an interference with free-market capitalism.[2] For them, "capitalism" by definition involves free markets.
Although it is arguable whether these meanings the word "capitalism" of the same kind are somehow "equivalent" under someone's subjective notion of equivalence, for the sake of not making a straw man argument when accusing someone else to be a proponent of capitalism, these different concepts must be clearly distinguished.
6.1 Capitalism and political ideologies
Some political ideologies favor capitalism:
- Libertarianism, which can be considered a branch of classical liberalism, defends a capitalist free market with minimal state intervention. (See laissez-faire.) Minarchist libertarians see the role for government in the economy as solely defending the rights of the participants against violence, theft, fraud, and damages such as pollution.
- Anarcho-capitalists see no role for government whatsoever. They believe that all government functions, including physical security and the adjudication of commercial disputes, will be better achieved by market mechanisms, such as mercenary armies and private arbitration.
- Objectivism argues that from the individual's standpoint, the only moral economic system is true capitalism, since capitalism itself can never come to exist without free men who act rationally and within the bounds of their unalienable, and rationally derived, rights.
- Conservatism varies depending on countries in its specific stances. In Western nations, conservatives often defend the status quo of capitalist practices. These are often called business conservatives. Many people who call themselves politically conservative, however, prefer a government-regulated capitalism (sometimes called "mercantilism") over free-market capitalism. According to them, free-market capitalism disrupts traditional ways of life and what they often call "family values". Thus, these conservatives can fit within the next category.
Some ideologies favor a mixed economy with capitalist and state-run elements:
- Dirigisme defends a mostly free market within the nation, but proposes state intervention so as to direct the industry into directions of higher priority, or so as to make it more efficient.
- Social democracy and new liberalism argue for extensive state regulation and partial intervention in an otherwise capitalist economy. Social democrats occupy a position between socialists and classical liberals with regards to economic matters. They see a need for government to regulate employment, trade, and labor, and sometimes favor nationalization of certain industries. See also welfare state, political liberalism.
- Distributism desires an economy with private property and with almost all people possessing a means of production. This would take place in for example a country of subsistence farmers. In a distributist economy, laws would be made to restrict large corporations from taking over. Distributists favor achieving these goals not primarily through government regulation, but firstly through grass roots efforts and collaboration.
- Fascism established a state-controlled capitalist economy with powers delegated to capitalist interests subservient to a militarized central government. Socialists sometimes describe modern capitalism as "fascist", meaning an analogy to historical fascism with its cooperation (or cronyism) between industry and government.
Some ideologies oppose capitalism and support a collectively run economy:
- Socialism argues for greater public control of the economy, under a more extensive kind of democracy than is usually seen in capitalism. Areas of private ownership may remain in certain sectors (such as small businesses) under socialism, but most economic sectors are run by the state for the benefit of the populace at large. In particular, the state is to control the "commanding heights" of the economy, such as the banking system and the major industries.
- Communism goes farther in the direction of government and/or social control of production, which calls for the overthrow, democratically or by revolution, of the capitalist system and the establishment of public ownership of the means of production. Communists see socialism as a stage towards the establishment of a stateless and classless economy. Historical Soviet Communism, a system of Party-controlled dictatorship (sometimes referred to as " Stalinism"), is distinct from the Communist ideal.
- Anarchism strives for the immediate abolition of both the state and private property, and the establishment of a communal society quite similar to the one advocated by communists as their final goal (but in contrast to the communists, anarchists oppose the idea of a transitional socialist stage).
