What is capitalism? The problem of the many and the one
What is capitalism? This question begs for an essential definition of some sort, a set of core features that distinguish capitalist societies from non-capitalist societies. I think we both agree that capitalism has social, economic, political dimensions that should be seen as standing in some kind of interconnected relation to each other. Yet a skeptic might claim it’s not so easy to specify the core elements of capitalism. After all, haven’t we learned from the “varieties of capitalism” debate that capitalism doesn’t look the same everywhere in the world?1
Might we not conclude that capitalist societies look so different from one another that there is no true common denominator? If this were the case, we face a real problem. If we cannot specify the core elements that make a social formation capitalist, how can we talk about a crisis of capitalism? Without those core elements, there would be no way to establish that the present crisis is really a crisis of capitalism and not a crisis of something else. The same holds for our resources to criticize
capitalism: how can we claim that the instances of social suffering we want to address are actually related to capitalism
, if we don’t even have a sufficiently clear and coherent concept of capitalism that allows us to identify its core elements?
Fraser: Good point. I myself start with the assumption that the present crisis can be understood as a crisis of capitalism. But that assumption needs to be demonstrated. And the first step is to answer the capitalism skeptic, so to speak, by showing that we can indeed speak of “capitalism” as such, despite its many varieties. This requires explaining what we mean by capitalism, defining it in terms of some core features that obtain across the broad range of societies we call “capitalist.” After all, it makes no sense to talk about varieties of capitalism if they don’t share some common underlying features in virtue of which they are all varieties of capitalism. So the challenge for us is to say what makes a society capitalist without homogenizing the great variety of ways in which capitalist societies can and do differ from one another. We will then need to clarify the relation between the core features we identify and the variety of forms in which they are instantiated across space and time.
Jaeggi: This issue has at least two dimensions: one vertical and the other horizontal. There is not only the question of varieties of capitalism with respect to the thesis that we confront contemporaneous capitalisms in the plural, coexisting in different societies at the same time. In addition, we are confronted with the historical development of different stages of capitalism. There are tremendous differences between earlier configurations of capitalism and present-day capitalism, and we could ask whether it’s still a good theoretical move to call all of them “capitalism.” How can we equate or relate the early stages of industrial capitalism with modern neoliberal and global capitalism? Is it even appropriate to use the same conceptual framework to analyze both the competitive capitalism of the nineteenth century and the “monopoly capitalism” of the twentieth, which the early Frankfurt School called “State Capitalism?” I think our first task should be to get at what core elements have to be in place for a social formation to count as some instantiation of capitalism.
Fraser: The historical point is important. I’m inclined to the view that, whatever else it is, capitalism is intrinsically historical. Far from being given all at once, its properties emerge over time. If that’s right, then we have to proceed cautiously, taking every proposed definition with a grain of salt and as subject to modification within capitalism’s unfolding trajectory. Features that appear central at the outset may decline in salience later, while characteristics that seem marginal or even absent at first could assume major importance later.
As you just suggested, inter-capitalist competition was a driving mechanism of capitalist development in the nineteenth century, but it was increasingly superseded in the twentieth, at least in leading sectors of what was widely understood as “monopoly capitalism.” Conversely, whereas finance capital seemed to play an auxiliary role in the Fordist era, it has become a major driving force in neoliberalism. Finally, the governance regimes that embed and organize capitalism at every stage have been transformed again and again in the course of the last 300 years, from mercantilism to laissez-faire liberalism to state-led dirigisme to neoliberal globalization.
These examples point to capitalism’s inherent historicity. What is at issue here are not simply different “varieties of capitalism,” which might exist side-by-side, but rather historical moments, which are linked to one another in a path-dependent sequence. Within this sequence, any given transformation is politically driven and, to be sure, traceable to struggles among proponents of different projects. But this sequence can also be reconstructed as a directional or dialectical process in which an earlier form runs up against difficulties or limits, which its successor overcomes or circumvents, until it too encounters an impasse and is superseded in turn.
Considerations like these complicate the search for a core definition. I don’t think they make such a definition impossible, but they do suggest we should proceed with care. Most importantly, we have to avoid conflating relatively fleeting historical forms with the more enduring logic that underlies them.
Core features of capitalism: an orthodox start
Jaeggi: Here’s a proposal to get us started. Let’s begin by positing three defining features of capitalism: (1) private ownership of the means of production and the class division between owners and producers; (2) the institution of a free labor market; and (3) the dynamic of capital accumulation premised on an orientation toward the expansion of capital as opposed to consumption, coupled with an orientation toward making profit instead of satisfying needs.
Fraser: This is very close to Marx. By starting in this way, we’ll arrive at a conception of capitalism that will, at least at first sight, appear quite orthodox. But we can de-orthodoxize it later, by showing how these core features relate to other things and how they manifest themselves in real historical circumstances.
Let’s start with your first point: the social division between those who own the means of production as their private property and those who own nothing but their “labor power.” I don’t mean to suggest that capitalist society harbors no other constitutive social divisions; I want to discuss some others very soon. But this one is certainly central: a definitive feature of capitalism and a historical “achievement” of it, if that’s the right word. This class division supposes the break-up of prior social formations in which most people, however differently situated, had some access to means of subsistence and means of production – access to food, shelter, and clothing, and to tools, land, and work – without having to go through labor markets. Capitalism destroyed that condition, separating the vast majority from the means of subsistence and production and excluding them from what had been common social resources. It enclosed the commons, abrogating customary use rights and transforming shared resources into the private property of a small minority. As a result of this class division between owners and producers, the majority must now go through a very peculiar song and dance (the labor market) in order to be able to work and get what they need to continue living and raise their children. The important thing is just how bizarre, how “unnatural,” how historically anomalous and specific this is.
Jaeggi: Yes, and this leads us to the second point: capitalism depends on the existence of free labor markets. Capitalist societies, as we know them, have tended to abolish unfree labor of the sort found in feudal societies. They institutionalize free labor on the assumption that the workers are free and equal. This is the official version, at least, but it is contradicted in reality by capitalism’s coexistence for over two centuries with New World slavery. But this aside, the labor power of “free workers” is treated as a good that one party to a legal contract (the worker) owns and sells to the other party (the employer-capitalist).
Historically speaking, this is a tremendous change with tremendous implications, one that alters daily life as well as the economic structure of the societies involved. Even without seeing societies divided, in a reductionist way, into economic base and ideological superstructure, we can say that their form as a whole changes once this is established. Moreover, since the free labor market is constitutive for capitalism, the normative ideals of freedom and equality find their place in an actual institution. They are not just a masking decoration; to some extent, they really are objectified and present. The capitalist labor market wouldn’t work without legally free and independent contractors. This is true even if at the same time those ideals are corrupted exactly in and through the labor market. Which brings us to the fact Marx pointed out so vividly: labor in capitalism is free in a double sense
The workers are free to work but also “free to starve” if they do not enter the labor contract.
Fraser: Exactly. Those conceived as “workers” are free, first, in the sense of legal status. They are not enslaved, enserfed, entailed, or otherwise bound to a given place or particular master. They are mobile and able to enter into a labor contract. But the “workers” are also free in a second sense: they are free, as we just said, from access to means of subsistence and means of production, including from customary use rights in land and tools. In other words, they are unencumbered by the sort of resources and entitlements that could permit them to abstain from the labor market. Their freedom in the first sense goes along with their vulnerability to compulsion inherent in the second sense.
That said, I want to underline your point that the view of the worker as a free individual is not the whole story. As you said, capitalism has always coexisted with – I would say, relied on – a great deal of unfree and dependent labor. And as I’ll explain soon, not everyone who works or produces has been considered a worker or accorded the status of a free individual – which is why I put the word “worker” in scare quotes before. The point, then, is that, in discussing the worker’s double freedom, we are talking only about one chunk of capitalist social reality – albeit a very important, even defining, chunk.
Right. We’ll have to come back to that point later. For now, however, I want to stress that the notion of freedom in a “double sense” doesn’t mean that freedom and equality in capitalism are fictitious or some kind of lip service. These notions are ideological in the deep sense that Adorno invoked, when he said that ideologies are true and false at the same time.3
The point is that freedom and equality are actually realized in capitalism and in fact must
be realized in order for the system to work. And yet at the same time they are not realized: the reality of capitalist work relations seems to undermine and contradict these norms – and not accidentally so.
Fraser: I would say that capitalism realizes thin, liberal interpretations of...