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  1. Capitalism and its alternatives ECON 434 | Spring 2011

  2. What is communism? • Some “answers”: • (to 2:40) • (start at 1:15)

  3. The response • • (to 3:25)

  4. What is capitalism? • Private property rights • Laissez faire government policies

  5. Some definitions • Socialism: The unifying theme of socialism is the call for social ownership of all major nonhuman factors of production, especially physical capital and natural resources. • i.e., land, factories, major pieces of capital equipment would be held by the government • Types: Utopian, Fabian, Christian • Goal: Equal outcomes, equitable distribution of wealth • Communism: The socialist ideal • "From each according to his ability to produce, to each according to need.“

  6. Utopian socialism • Collective ownership eliminates greed and promotes personal growth • What about prices? • Superfluous: Joy in giving = joy in receiving • Thomas More (late 15th/early 16th c): Utopia • Robert Owen (mid 1800s): Develops small, socialist communities in Scotland and U.S.

  7. Fabian socialism • Developed in England (late 1800s): nationalization of heavy industry; municipal ownership of public utilities [big communities as opposed to small] • H.G. Wells (author), George Bernard Shaw (playwright) • Founded British union movements (today’s Labour Party)

  8. Christian socialism • Conservative theology: Christianity supports the status quo • “Render unto Caesar that which is Caesar's and unto God that which is God's“ (justifies existing distributions of wealth) • Christian socialism advocates charity and peaceful social reforms • Resembles Fabian socialism in its goals; most Fabian socialists, however, are atheists or agnostics. • Liberation theology • Branch of Christian socialism that evolves in Latin America • Supports violent overthrow of repressive regimes (Christianity + Marxism)

  9. Marxism (revolutionary socialism) • Socialism will replace capitalism after a violent revolution • Based on a type of dialectical analysis championed by Georg Hegel • Every concept has a thesis and an antithesis • Long – short • Rich – poor • The combination of opposites yields a synthesis: long + short  height; rich + poor  wealth

  10. Marx cont. • Marx uses dialectical analysis to color his take on historical and economic processes • All history is a class struggle • Agricultural interests (thesis) + manufacturing interests (antithesis)  industrial revolution/the rise of capitalism (synthesis)

  11. Class analysis • What’s a class? • Historically: Class was based on social relationships (ascribed status) • With capitalism: Class is based on socioeconomic considerations • Based on the particular relationship you maintain with the forces of production • Capitalism creates 2 antagonistic classes: • Those who own the means of production (bourgeois) • Those who work with the means of production (proletariat) • Class struggle: attempt to control the means of production

  12. Marx’s beef with capitalism • Rent, interests, profit: surplus value • Increasing inequalities make capitalism dynamically unstable (Marxian capitalistic crisis) • Boom and bust cycles grow more pronounced • Capitalism sets the stage for its own demise • Attempts to employ labor as cheaply as possible will “drag” more and more into the proletariat • As the proletariat grows, it recognizes itself for the first time • Shared class interests trump ethnic or nationalistic differences • When the proletariat revolts, it emancipates everyone from class relations under capitalism

  13. Marxian stages of economic development • Pre-class societies • Tribal (pre-history) • Class societies • Ancient (primitive culture) • Feudal • Capitalism • Dictatorship of the proletariat • Post-class societies • Communism

  14. The communist ideal • Capitalism: Sell labor for wages • Communism: Labor is not used for subsistence; instead, it’s used for expressing our innate uniqueness as human beings • Conditions of material scarcity create a world where you try to achieve sufficiency, not excellence • When subsistence needs are met without having to do anything, you do what fulfills you: “free labor”

  15. Predictions • Globalization • Capitalism “must nestle everywhere” • Does globalization, as practiced today, help or hinder the realization of freedom, per Marx? • A debate about the sharpening (or dulling) of class distinctions • Misery of workers • Explosive business cycles • Bloody revolutions that successfully overthrow capitalism

  16. Anarchism • Philosophical anarchism counts on cooperation among people to ensure social harmony in the absence of government or law. • How to get rid of government? • William Godfrey: Ignore it • Mikhail Bakunin: Random violence

  17. Syndicalism • Syndicalism would abolish the state, corporate capitalism, and private ownership of nonhuman resources. • Each industry would be owned by its workers and run by elected worker committees (syndicates). • Industry-wide trade unions • Founder: French philosopher Georges Sorel • In the U.S.: 1905, Industrial Workers of the World (wobblies) • Eugene Debs collects +1 million votes for president during WWI • Overthrow capitalism by locking out managers and seizing factories.