We have argued that the essential element of capitalism as a system is not, as is often contended, proletarian wage labor or production for the market or factory production. For one thing, all of these phenomena have long historical roots and can be found in many different kinds of systems. In my view, the key element that defines a capitalist system is that it is built on the drive for the endless accumulation of capital. This is not merely a cultural value but a structural requirement, meaning that there exist mechanisms within the system to reward in the middle those who operate according to its logic and to punish (materially) those who insist on operating according to other logics.These words are Immanuel Wallerstein's, from his new prologue to the 2011 edition of volume III of The Modern World-System: The Second Era of Great Expansion of the Capitalist World-Economy, 1730s-1840s. I quote them here because definitions matter and we have too many of them for capitalism.
We have argued that, in order to maintain such a system, several things are necessary. There has to be an axial division of labor, such that there are continuous exchanges of essential goods that are low-profit and highly competitive (i.e., peripheral) with high-profit and quasi-monopolized (i.e., core-like) products. In order to allow entrepreneurs to operate successfully in such a system, there needs in addition to be an interstate system composed of pseudosovereign states of differing degrees of efficacy (strength). And there also have to be cyclical mechanisms that permit the constant creation of new quasi-monopolistic profit-making enterprises. The consequence of this is that there is a quite slow but constant geographical relocation of the privileged centers of the system. (xiv)
I have, in the last year or so, found myself embroiled in various online discussions here and there about capitalism and our current predicament, etc, in which the conversation can only go so far because we, the participants, are not operating under the same set of assumptions on what capitalism, in fact, is. I tend to avoid lengthy online back-and-forths, for a variety of reasons, not least of which is the inadequacy of my available devices (which means the mechanics of it are unpleasant). But also, where once I was quick to write lengthy responses to people, usually via email, now I shy away from them. In part, I don't want to lose a piece of writing in the bowels of another blog's comments, and I write too slow to effectively respond here. It's also true that I'm simply not read deeply enough in the Marxist or liberal economic literature to respond to certain kinds of pedantry. So if someone cites a particular of a given debate, I'm often at something of a loss. However, though I would like to deepen my reading of such literature, the truth is I'm only going to get to so much of it, and things are happening right now. My gut tells me that most of it is unnecessary.
A few years ago I read Ellen Meiksins Wood's Origins of Capitalism, and I found it very helpful. She is, of course, a Marxist, writing in the aftermath of the Brenner debates of the 1970s. She helped me to see a number of different things much more clearly than I had seen them before (for just one example, the state's role in enforcing propertylessness). I was further helped along by essays from the Midnight Notes Collective, and then David Harvey's book-length study of Marx's Capital, The Limits to Capital, as well as a couple of Harvey's other books. Then came the first volume of Capital itself, along with Harvey's online lectures, and the feminist approaches of Maria Mies (Patriarchy and Accumulation on a World Scale) and Silvia Federici (Caliban and the Witch). The feminist works are crucial; they seem to take the analysis to its logical conclusions that too many Marxists seem unwilling to take it (so they said; but I had no trouble taking their word for it, given my own limited experience with the literature). Readers will notice that I've rehearsed this sequence before. All apologies. In any event, my point here is that something nagged at me. I was still having trouble understanding where it came from, and why, and it seemed really important that I do understand it, in order to wrap my head around the problems facing us today. Then I read Giovanni Arrighi's The Long Twentieth Century, my first exposure to world-system analysis, and many things began to fall into place in my mind. This led me to Wallerstein. First to his slim World-Systems Analysis: An Introduction, then to his now four-volume study, The Modern World-System. (David Graeber's work plays a big role here, too; I'm thinking a few of the essays in Possibilities, as well as the more recent Debt.)
I realized that what had troubled me were questions of focus and certain sets of assumptions. I had difficulty with the idea of a particular capitalist "state" (or "states" competing with each other) (though, indeed, Wood, in her Empire of Capital, had helped clarify for me the necessity of the state apparatus for capitalism), with the very focus on "mode of production", with questions and apparently long-running debates about such topics as whether or not slavery was capitalist, which seemed silly on their face (of course it was capitalist; for just one point, the feminist focus on how unpaid labor underpins the wage system is important here). I desired, and insisted, without knowing it, a longer view (somewhat ironic, considering the subtitle of Wood's book is, in fact, "a longer view"; it's not quite long enough), and a more detailed view. Arrighi's and then especially Wallerstein's books have helped me enormously, providing a framework in which things fit together much better (not like a puzzle, but like life, if you'll pardon the expression). Anyway, I provide the passage at the top of this post as a placeholder and reference point: this is the definition of capitalism I'm working from, the one that makes the most sense to me. Recent claims that we've already moved away from capitalism into a feudalism-like "rentism" seem to me to misunderstand both feudal arrangements and capitalism itself, and especially miss the ease with which the former historically shaded into the latter. There's nothing un-capitalist about monopolies or rent. Misplaced emphasis on wage labor and modes of production are distracting. Here Wallerstein continues:
Capitalism is a system in which the endless accumulation of capital is the raison d'être. To accumulate capital, producers must obtain profits from their operations. However, truly significant profits are possible only if the producer can sell the product for considerably more than the cost of production. In a situation of perfect competition, it is absolutely impossible to make significant profit. Perfect competition is classically defined as a situation with three features—a multitude of sellers, a multitude of buyers, and universally available information about prices. If all three features were to prevail (which rarely occurs), any intelligent buyer will go from seller to seller until he finds one who will sell at a penny above the cost of production, if not indeed below the cost of production.I could go on, but will not, not now. But consider this a re-beginning, of sorts, on this topic.
Obtaining significant profit requires a monopoly, or at least a quasi-monopoly, of world-economic power. If there is a monopoly, the seller can demand any price, as long as he does not go beyond what the elasticity of demand permits. Any time the world-economy is expanding significantly, one will find that there are some "leading" products, which are relatively monopolized. It is from these products that great profits are made and large amounts of capital are accumulated.