I : What Is Capitalism?

“Commerce is, in its essence, satanic. Commerce is the repayment of what was loaned, it is the loan made with the stipulation: Pay me more than I give you.” —Baudelaire, Mon cœur mis à nu

I have no entirely satisfactory answer to the questions that prompt these reflections; but I do think the right approach to the answers can be glimpsed fairly clearly if we first take the time to define our terms. These days, after all, especially in America, the word capitalism has become a ridiculously capacious portmanteau word for every imaginable form of economic exchange, no matter how primitive or rudimentary. I take it, however, that here we are employing it somewhat more precisely, to indicate an epoch in the history of market economies that commenced in earnest only a few centuries ago. Capitalism, as many historians define it, is the set of financial conventions that took shape in the age of industrialization and that gradually supplanted the mercantilism of the previous era. As Proudhon defined it in 1861, it is a system in which as a general rule those whose work creates profits neither own the means of production nor enjoy the fruits of their labor.

This form of commerce largely destroyed the contractual power of free skilled labor, killed off the artisanal guilds, and introduced instead a mass wage system that reduced labor to a negotiable commodity. In this way, it created a market for the exploitation of cheap and desperate laborers. It was also increasingly abetted by government policies that reduced the options of the disadvantaged to wage-slavery or total indigence (such as Britain’s enclosures of the commons starting in the middle of the eighteenth century). All of this, moreover, necessarily entailed a shift in economic eminence from the merchant class  – purveyors of goods contracted from and produced by independent labor, subsidiary estates, or small local markets – to capitalist investors who both produce and sell their goods. And this, in the fullness of time, evolved into a fully realized corporate system that transformed the joint-stock companies of early modern trade into engines for generating immense capital at the secondary level of financial speculation: a purely financial market where wealth is created for and enjoyed by those who toil not, neither do they spin, but who instead engage in an incessant circulation of investment and divestment, as a kind of game of chance.

For this reason, capitalism might be said to have achieved its most perfect expression in the rise of the commercial corporation with limited liability, an institution that allows the game to be played in abstraction even from whether the businesses invested in ultimately succeed or fail. (One can profit just as much from the destruction of livelihoods as from their creation.) Such a corporation is a truly insidious entity: Before the law, it enjoys the status of a legal person – a legal privilege formerly granted only to “corporate” associations recognized as providing public goods, such as universities or monasteries – but under the law it is required to behave as the most despicable person imaginable. Almost everywhere in the capitalist world (in America, for instance, since the 1919 decision in Dodge v. Ford), a corporation of this sort is required to seek no end other than maximum gains for its shareholders; it is forbidden to allow any other consideration – say, a calculation of what constitutes decent or indecent profits, the welfare of laborers, charitable causes that might divert profits, or what have you – to hinder it in this pursuit.

The corporation is thus morally bound to amorality. And this whole system, obviously, not only allows for, but positively depends upon, immense concentrations of private capital and dispositive discretion over its use as unencumbered by regulations as possible. It also allows for the exploitation of material and human resources on an unprecedentedly massive scale. And, inevitably, it eventuates in a culture of consumerism, because it must cultivate a social habit of consumption extravagantly in excess of mere natural need or even (arguably) natural want. It is not enough to satisfy natural desires; a capitalist culture must ceaselessly seek to fabricate new desires, through appeals to what 1 John calls “the lust of the eyes.”