It has been argued by some confused people through history that there’s a problem with capitalism. What on Earth is capitalism, anyway? It’s really one or all of three things; first, the private ownership of the means of production; second, the process of increasing capital intensity over time; and third, the confluence of entrepreneurship, profit & loss, and finance (investment and lending). If the preceding sentence was not the neatest summary of capitalism you’ve read in a while, I apologise. Some people are never satisfied – OK, praxeologically none of us is ever completely satisfied, but give me a break here.

So what do I have to say on the matter? All four social systems described below are explained under the assumption that private property in one’s person and consumption goods would continue in at least the same nominal, impaired fashion in which they exist in the statist world of today. So personal property rights and self-ownership would be nominally respected, as they are nominally respected in the UK, US, Canada, Australia, New Zealand and South Africa today. Capital goods – those which are used to make other goods and services – are not suffered to be privately owned or disposed of, meaning there’s no free exchange in the three socialist systems offered up for analysis here. And the four arrangements we will be analysing today are;

 

COMMUNAL OWNERSHIP = COMMUNISM

SOCIAL OWNERSHIP = SOCIALISM

WORKER OWNERSHIP = SYNDICALISM

PERSONAL, FREELY TRANSFERABLE OWNERSHIP = CAPITALISM

 

Not a horrible summary, but what did I mean by these four definitions? Below I will elaborate and hopefully make plain why capitalism is the most sound of the options available to living beings with free will. Now there are a couple of things that all four systems described in this article have in common. No taxes, of course. None of the four systems described here call for taxation as we recognise it. Also, we are assuming for now that all four are self-sustaining and are functioning as best they can. Aside from that our only other big assumption in all four anarchotopias which follow is that they are all global and universal, so in each example the system in question is the only one. This very point has an interesting twist in the fourth system. Time to meet the contenders face to face and see which really is the fairest of them all!

 

COMMUNAL

The commune owns all capital goods within the commune’s geographical purview. Communes would be quite small. Indeed, in a scientific Communism they’d all probably be capped at about 150 people each with surplus population being reassigned to other, hard up communes or new ones being created if several over-populated ones could find 150 people to smush together. Decision-making would be democratic – this is a subset of socialism after all – so there will be 150 votes on what each member will get up to using whatever capital goods are available. Letting individuals choose for themselves is too risky considering the lack of economies of scale. Communes will attempt to be as self sufficient as possible. Some might specialise in particular products and export them to other communes, but no one commune can possibly have the economies of scale to produce even the value that can be managed today, let alone that needed to support civilised lifestyles and spare time.

Productivity is permanently stymied by the small size of communes and the inability of individuals to band together ad hoc and own some means of production for their own ends. Each person is constantly browbeaten into a communally decided path because, if they were free to choose their own path, they’d stop living this way and try to attain private property rights in capital goods. As should be obvious this is just village serfdom.

 

SOCIAL

Society owns the means of production. In practice that means the state is the owner. In theory the citizens get to vote on every policy every regulation, every curfew, every worker re-education program, every attempt to keep every human on Earth inside the system. In political terms this is actually the worst of the three because theoretically it could last a long time if established, maybe permanently or until a total social collapse. This kind of socialism is the one the work-shy will gravitate towards as it offers them a world in which everyone is guaranteed certain minimum standards though political expropriation.

This one takes the Communist society above and blows it up to the global level, with one global monopoly per economic good or service – World Health Service, World Retail Service, World Bureau of Logistics, Earthfeed, Earth Science Research Agency, Planet News Network, Health and Safety Directorate, etc – with every person on Earth being a member of the World General Secretariat where every human on Earth votes many times daily on resource allocation for either every single enterprise in the world or just the ones that they are registered as a customer or employee of. Like Communism, everyone owns everything, so nobody does, meaning that, once again, production decisions are subject to the same economic calculation problem that brought the Soviet Union low.

 

WORKER

Only workers own the means of production, and yes, that means you only own a capital good while you are actually using it. Which is to say, the syndic you’re a part of owns the stuff you’re using while you’re using it, with property transfer based on continual expropriation as one resource gets abandoned by one syndic and leapt upon by workers from another. Non workers are not part of a syndic and their relationship to it is the same as that of labourers’ families to trade unions today. In practice this turns into the same kind of anti-division of labour communal serfdom as communal ownership above, but even worse because the society enforces labour collectivism in the trade unionist sense along with that property expropriation described above.

This inevitably leads to horrible brutality and living standards that resemble a post-apocalyptic  shell of a civil society, rather like the living conditions in apartments in Havana today or in houses in Yugoslavia in the 1980’s. The only positive about this system is that, more than the other two, it actually permits exchange in a marketplace and so some semblance of sound economic calculation can exist. But against the backdrop of continual expropriation and labour militancy conditions will never be certain enough for people to risk making any sizeable life-improving investments in improving capital infrastructure.

 

PERSONAL

People, singly or in voluntary groups, own the means of production. When a real human individual freely buys into or receives in gift some quantity of capital goods, they may subsequently sell them on or employ them in creating goods for their own individual ends. Generally that means making a profit and offering goods on the market. A market is just an intellectual abstraction; it is the setting for and consequence of the voluntary exchanges which form the basis on which capital owners figure out what prices to charge for what they wish to sell. Too low and there will be under-supply, too high and there will be insufficient demand. Real life prices do not represent some kind of equilibrium, but rather an imperfect, subjective attempt at finding equilibrium, through maximum profit versus minimum price.

The lower the price, the more customers. The higher the price, the fatter the profits per unit sold. These abstractions called markets exist in land, labour, capital itself and all physical goods and non-physical services that are produced. This is why people can continually increase productivity through increasing capital intensity, as any factors can be priced and prioritised to assure the soundest investment decisions possible. Why personal, and why freely transferable? It’s because you can create whatever capital ownership arangement you want with something you buy with whoever consents to get into it with you. This means that, uniquely of the four systems on show tonight, personal, freely transferable ownership of the means of production by definition accommodates the other three arrangements above.

This fourth one most resembles what happens today despite the existence of the state. We buy, sell, receive and give title to the means of production, distribution and exchange. Indeed nowadays a smartphone gives you several examples of all three in your pocket, so that’s quite a spread of economic power. Now wealth is in the hands of everybody; even poorer people in developing countries in South America, Africa, Asia and the Pacific have smartphones after all! Cryptocurrency, peer-to-peer online contract ledgers, sharing economy services like Uber, and 3d printing will, between them, liberate us all from penury and the necessity to work 40+ hours a week to pay our way through life.