Sunday, April 21, 2024

Capitalism vs the free market

William Davies reviewed The Price is Wrong: Why Capitalism Won't Save the Planet by Brett Christophers in a recent issue of the London Review of Books.

The opening of his review is worth reading in its own right:
The​ words ‘market’ and ‘capitalism’ are frequently used as if they were synonymous. Especially where someone is defending the ‘free market’, it is generally understood that they are also making an argument for ‘capitalism’. 
Yet the two terms can also denote very different sets of institutions and logics. According to the taxonomy developed by the economic historian Fernand Braudel, they may even be opposed to each other.

In Braudel’s analogy, long phases of economic history are layered one on top of another like the storeys of a house. At the bottom is ‘material life’, an opaque world of basic consumption, production and reproduction. 
Above this sits ‘economic life’, the world of markets, in which people encounter one another as equals in relations of exchange, but also as potential competitors. Markets are characterised by transparency: prices are public, and all relevant activity is visible to everyone. And because of competition, profits are minimal, little more than a ‘wage’ for the seller. 
Sitting on top of ‘economic life’ is ‘capitalism’. This, as Braudel sees it, is the zone of the ‘antimarket’: a world of opacity, monopoly, concentration of power and wealth, and the kinds of exceptional profit that can be achieved only by escaping the norms of ‘economic life’. 
Market traders engage with one another at a designated time and place, abiding by shared rules (think of a town square on market day); capitalists exploit their unrivalled control over time and space in order to impose their rules on everyone else (think of Wall Street). 
Buyers and sellers on eBay are participating in a market; eBay Inc. is participating in capitalism. Capitalism, in Braudel’s words, is ‘where the great predators roam and the law of the jungle operates’.


nigel hunter said...

It reminds me of Maslow's hierarchy of needs where lowest position is the buying and selling market place and at the top the sharks who rule for themselves and greed. Free Market between individuals rising to full blooded capitalism where greed and power is all.

nigel hunter said...

Historically ,say the ordinary Aztec does the ploughing, fighting, routine work that supports the traders up the scale to the Emperor. He enjoys all the riches and people look up to him. However comes a disaster, it is those at the bottom that take the hit whilst the Emperor can survive. A constant restructuring that in the end leads to decline.

Anonymous said...

I believe that Maslow's hierarchy of needs has been recalibrated. The most primitive needs are now "battery" and "wifi".