The capitalist mode of production began its career in the hands of merchant traders and capital took the form of Commercial Capital. Money was used to commission, purchase, transport and sell commodities from wherever they were produced to wherever they could be sold. Warehousing, market stalls and shipping were the most visible indicators. Merchant traders became rich and socially influential.
Later an industrial revolution occurred and capital began to be used to manufacture commodities on a large scale and on a continuous basis. Industrial Capital began to dominate socio-economic activity, it’s owners became the wealthiest and most influential. Factories, mines and large-scale farms were the most visible indicators.
The accumulated profits generated during those two stages accelerated a third stage in which loan or finance-capital became the most dominant form. Accumulated money was loaned at interest, to other capitalists, (merchants, industrialists, speculators) and governments. Banks, finance-houses and stock-exchanges, became the most visible manifestations of this particular stage.
Each of these stages had its own internal evolution and had different effects upon the general social and international relations within which they operated, but all grew absolutely, whilst their relative dominance shifted. The intellectual strategies of these interconnected stages appeared within economic theory. Mercantile, protectionism dominated early economic discourse and was replaced by liberal ‘free-market’ thinking when industry dominated governments.
The period of ‘free-trade’ capitalism led to freedom for the strongest capitalists (and capitalist countries) to dominate the weakest. Results! ‘Enclosures’, ‘Colonialism’ and ‘Imperialism’. Wars over access to essential raw materials and markets were triggered – including two world wars. Furthermore, technical advances in capitalist production techniques led to large-scale unemployment and potential (as well as actual) uprisings and revolutions. So after the Second World War a modification of free-market economics was proposed by John Maynard Keynes and was accepted by most European and Western governments.
This Keynesian economic strategy involved governments playing an active and leading role in economic and social affairs by regulating, stimulating and directing economic activity along with promoting social welfare programmes. Governments began to control capitalists. This welfare-capitalism model of economic theory and practice appeared to solve some of the problems associated with ‘free-for-all’ capitalism, but it hadn’t really.
A new phenomena occurred in which taxes on capital, profits and wages were increased to pay for this governmental activity. However, competition continued and in the leading capitalist countries, profits slumped, capital was increasingly exported and large-scale unemployment returned.
The drain on profits led to some economists and politicians resurrecting free-market liberal ideas – but in a new form – hence a new ‘liberalism’ or neo-liberalism. This involved free-market capitalism with new (ie neo) twists. The continued domination of finance-capital meant that that particular sector was able to persuade politicians such as Ronald Reagan and Margaret Thatcher (et al) to introduce de-regulation of banking and financial transactions; to hold down wages and salaries by limiting trade union bargaining; and by allowing finance-capitalists to purchase public utilities, (eg, gas, electricity, water, telephones, postal services etc.,) at bargain prices.
Consequently wealth for the rich upper and middle-classes soared, particularly in Europe and North America whilst many working people living there sank into relative and absolute poverty. However, the advocates of neo-liberal capitalism were not fully satisfied by this mega re-distribution of social wealth upward to the elite. They wanted to secure it. Working people might get sufficiently upset by poverty and precarious conditions, to elect governments pledged to end this neo economic/financial theft. So in the late 20th and early 21st centuries, some elites invented a means to prevent this.
The T.T.I.P. Of a bureaucratic iceberg.
Neo-liberal theorists, financiers, economists and politicians collaborated in writing trade agreement documents, such as the Transatlantic Trade and Investment Partnership, (TTIP) which would allow, private companies to prevent governments from taking any action which damaged or diminished their profitability. A future of capitalists controlling Governments.
Governments will be compelled to pay taxpayers money to compensate for losses incurred to capitalists by local or national government actions. Revealingly, these trade agreements are not available for public scrutiny. Nor are the special courts of arbitration open to the public. Secrecy and elite-only access to these machinations of the capitalist and pro-capitalist elite are strictly enforced.
Financial, economic, political and social power already resides in the hands of the capitalist elite and further bureaucratic forms are being used against the ordinary people and their representatives. The capitalist real-world god is still profit, but their New Testament is now neo-liberalism and the Cardinals and Pontiffs of capital are now the owners/controllers of ‘too-big-to-fail’ corporations. Consequently, neo-liberalism has transformed ordinary people’s rights into the modern equivalent of dependent serfs and peasants. That may seem bad enough, but ecologically, there is more.
Profit-based production and consumption, increases commodity volumes and reduces labour costs. The manufacturing processes of commodities, also produces an increase in pollution, ecological damage and climate-change crisis. It also – via neo-liberal financed automation and artificial intelligence – reduces the numbers and pay of people employed who are then unable to purchase this increased production.
Over-production, stagnation and social strife.
Existing capitalist relative-overproduction is now increasing toward a 21st century generalised over-production crisis, leading to further economic stagnation before economic collapse and social strife. Yet a mixture of ignorance and self-interest means practically all pro-capitalists are blind to such unresolvable contradictions waiting to explode among their countries citizens.
Since these elites, dominate, economics, finance, education, science, politics, media and law, and are blind to the contradictions at play, ordinary citizens are not aware of them either. So those who suffer most are left struggling to understanding why. Thus leaving them open to being persuaded to blame other victims of the same socio-economic system. Divide and rule is daily being promoted in the hope of diverting attention away from the economic system capitalists promote and defend.
Applying neo-liberal theory and practice to 20th century capitalism has enabled a further enrichment of the elite by a further impoverishing the non-elite.
Roy Ratcliffe (January 2020.)