Capitalism: An Archaic Critique, Part I

A Speech Delivered to the Sydney Traditionalist Forum, Oct. 29th 2022

This article is the first half of a speech I delivered this year to the Sydney Traditionalist Forum. I have made it free to all. If you like this, please consider a paid subscription to support Imperium Press and keep us financially independent of payment processors.

- Mike

If you’d have told me 7 or 8 years ago that I’d be delivering a speech critiquing capitalism, I wouldn’t have believed you. Back then I was a libertarian, and it’s been a long journey from there to here.

Lots of other people have been on similar journeys. 2016 was a real watershed moment; you can only imagine the panic of the managerial class as the right turned away from liberalism, popular sovereignty, rule of law, constitutionalism, anti-statism—but above all, and what I want to talk to you about today, we saw the right turn away from capitalism.

But a lot has happened since 2016—most of it bad. For the man on the street, the genie is out of the bottle—he can’t unsee the blatant power politics, but increasingly the dissident right is starting to retreat back into its pre-2016 priors. It’s starting to believe that the answer to this power politics is popular sovereignty, constitutionalism, even liberalism. Above all, the right is crawling back into the warm bosom of anti-state capitalism as a knee-jerk reaction to COVID tyranny.

So, the right needs, today more than ever, a serious and foundational critique of capitalism, a critique that strikes at the root. But first let’s take a short tour through the critiques that others have offered, both from the left and the right, and see what we can learn from them.

One critique of capitalism that used to have a lot of currency comes from social democrats—Thomas Piketty is a notable example. His book Capital in the Twenty-First Century argues that inequality is a feature of capitalism and not a bug, and that the unchecked growth of inequality threatens the democratic order. If only it did. This line of argument has more or less been abandoned since the rise of Donald Trump, because it’s quite clear that capitalism serves the aforementioned power politics by obscuring the continuum between formal power and informal power.

Another critique from the left comes from anarchists, typified by Proudhon’s polemical assertion that “property is theft.” However, this can only ever be polemic, because the concept of theft presupposes a concept of property—a rightful owner from whom something is taken. The subtext here is that ownership is governed by use—so-called usufruct property. The result is the total abolition of the concept of property, as property rights only come into question where property is not occupied—so-called absentee ownership, a redundant concept. This and the notion of usufruct were then taken up by Marx and elaborated into his own system.

Marxism is by far the most influential critique of capitalism ever developed by the left. Most of its key ideas are wrong, but at least wrong in interesting ways. The base-superstructure model, whereby a society’s productive forces shape its ideology more than vice versa, is straightforwardly false—compare the superior explanatory power of Coulanges’ account of the decline and fall of the classical world by the developments in its religion. Marx gets the base-superstructure backwards, but his contribution lies in pointing out the reciprocal and dialectical nature of the relationship.

Marxian exploitation is similarly wrong, but interestingly so. The idea is that value is a function of socially necessary labour time (SNLT), the average amount of labour needed to produce something. However, Marxism smuggles prescriptions into its descriptive system by its idiosyncratic use of terms. For the Marxist, “value” is restricted to exchange value, and only for commodities—a term which is itself idiosyncratic to the Marxist. For him, “commodities” are things created by labour to be sold, excluding what we normally take to be commodities such as land or raw materials. The result is the elaboration of a tautology: the value that attaches only to things created from labour, is a function of the amount of labour that went into them. In excluding from its value analysis anything not created by labour, Marxism enshrines the concept of usufruct property and makes anything else so-called “exploitation”.

Marx’s concept of alienation is his most valuable. But the kind of autonomy he describes as being the essential element in human nature only recapitulates Enlightenment ideas that justify unfettered capital in the first place. The concept of alienation has been much better developed by the right.

Moving on from left-wing critiques of capitalism, we have Georgism, which sits uncomfortably on the boundary between the left and right. The basic idea is quite simple: that land is a corporative asset held jointly by all society, and so we need a land value tax to redistribute the gains from economic rent, which by extension are held jointly by all society. This is an intriguing school of thought that maintains the concept of private property along with the concept of corporative property, but it doesn’t go far enough—why should only land be corporatively owned? What’s more, it still bases its analysis on utilitarian assumptions, without stopping to inquire whether these assumptions are part of the problem of capitalism in the first place.

Various critiques of capitalism have been levelled by fascists. The best known is perhaps that by Gottfried Feder, whose Manifesto for Breaking the Interest Bondage of Money is directed toward abolishing usury. This anti-usury concept in some ways echoes the Georgists, where the money supply is viewed as a kind of corporative asset, the loan of which is to be managed by state-run institutions with corporative ends in mind. Feder’s analysis is right, but it doesn’t go far enough either—clearly there’s more to the problem than usury.

Another important fascist critique is offered by Ugo Spirito. His programmatic economy turns the idea that “authoritarianism is fine in a village but not in industrial societies” on its head. Liberal economics, with its idea of the invisible hand, rejects the idea that the economy is directed from above, but Spirito points out that no economy is ever anything but—which events since 2016 have demonstrated quite clearly. All societies have an economic program, including capitalist societies. Where capitalism differs from fascism is that the program, the goal, is hidden, not discussed out in the open amongst syndicates, corporations, or guilds, but behind closed doors amongst technocrats with no accountability. Far from producing subsidiarity, capitalism obscures authority by pretending to do away with it, thereby making it unopposable.

Finally, we get an interesting critique of capitalism from the right by the distributists, exemplified by the papal encyclical Rerum Novarum. Like the fascists, they take an integral approach to economics, prizing subsidiarity and modelling themselves after the guild system. Where distributism stands apart is in its theological approach to economics, partly sacralizing property as something God-given and ipso facto something inherently corporative. This is a very attractive school of thought, but it does tend to be wary of state socialism and so there is a question of how land is to be distributed, and it does subscribe to the bottom-up social ontology of many of the left-wing critiques.

Overall, the critiques from the left generally miss the mark, whereas the critiques from the right are more on target but are largely ahistorical. And none of these critiques really attempts to drill down and work out exactly what capitalism is in the first place—except, to its credit, Marxism. If capitalism is simply something like “private ownership of property for profit,” where’s the objection? Private property is as old as the hills, and man has always expected profit from the soil. If this definition applies as well to us today as it applies to the classical world, perhaps we need to dig a bit deeper.

As an alternative to this I propose a different definition of capitalism, and implicit in this definition is a foundational critique. The definition is simple: capitalism is the total desacralization of property. All the valid critiques just mentioned are comprehended and contained in this definition.

The emphasis here is on property. Capitalism is primarily about property, because economics, from Greek oiko-nomos (lit. “household law”)—economics without property is empty of content. But capitalism is not about private property, certainly not in the Marxian sense—Marx’s notion of private property cashes out to the ability to rent things: non-usufruct property. But non-usufruct property is ancient. Double-entry bookkeeping is ancient too, so it’s not about profit either. Nor is it about markets, commerce, entrepreneurship, supply and demand, commodification—it’s not even about capital. All these things formed the backbone of ancient economies.

Capitalism is not primarily about private property, but it’s about some sort of property. So, to understand the break between capitalism and what came before it, let’s work our way back, and find out how property has changed with time.

On the surface, the major break between feudal and capitalist property relations was in breaking away from joint-ownership. There’s an inherent sociality to feudalism not found in later social orders. Feudalism arose from the combination of vassalage with fief-holding—that is, it arose from the inherently personal obligation to a man, in conjunction with the granting of immovable property by that man. Property under feudalism is bound up with social obligation—all property is held subject to the performance of duties.

But the duties are not entirely one-sided. The mark of feudal property is the double-proprietorship, and this two-way ownership holds between lord and vassal, as well as between landlord and tenant. The vassal holds his fief only so long as he renders his lord homage and service. Later, as feudal property became desacralized, this service could be acquitted in terms of payment, but originally the obligation had to be carried out personally. However, the lord also had duties to his vassal, and if the lord didn’t offer protection, immunity, and political authority, the vassal was not obligated to him. It was the same between landlord and tenant—the tenant owed the landlord service, but the landlord owed him protection and the maintenance of his rights. In feudalism we see the superior ownership of the lord of the fief coexisting with the inferior ownership of the tenant. How different is all this than under capitalism? Joint-ownership is not just possible, as under capitalism, but all property is corporative.

One mark of sacral property is inalienability; feudal property was not exactly inalienable, but in some degree indivisible. The serf can’t be alienated from his land and can’t be parted from his family—this is one of his rights, which is God-given and sacred. More sacral still is the conveyance of the fief, the transaction upon which the entire feudal economy depended, and this was done by the vassal rendering the lord homage and fealty. These two obligations are not exactly synonymous—homage is older, and traces back to the ancient Germanic custom of admission into the männerbund, whereas fealty gives Christian sanction to this obligation. Homage, however, was the essentially religious tie that bound all feudal society together, including its property relations.

All feudal property stood upon this sacral basis, however indirectly. Later, the glue that held the system of property relations together came to be the great chain of being, where each man in the divine hierarchy, from bonded serf all the way up to the Holy Roman Emperor, could trace his part in the social order unto the throne of God himself. And property itself was in some sense consecrated. It was restricted in its usages; it was possible to abuse it; above all, property conferred not only rights, but duties. Property was not exactly a sacred relation, but nor was it purely economic—it was a mixture of the two. The break between feudalism and capitalist was not so much the break between corporate and individual ownership; more fundamentally the break involved the loss of this mixed sacrality.

But it was a mixed sacrality. Feudalism was a mixture of Germanic and Roman elements, and to see the different elements each brought to the table, we have to seek the origins of feudalism itself.

Part II coming next week.