A different way to understand the economy
By Vlad Bunea
October 21, 2024
Source: Originally published by Z. Feel free to share widely.
Image courtesy of Vlad Bunea
For a while I have been talking on this channel about a heterodox definition of capitalism. A definition that does not discuss capitalism to be mainly about free markets, private ownership of the means of production, economic freedom, or supply and demand. My definition is built as an x-ray machine. It’s meant to help you see through the web of lies, deceit, narratives, political speeches, corporate talk, business media talk, marketing ploys and cultural delusions that maintain the dominance of capitalism. This simple definition also wants to focus your attention on the unprecedented, megalomaniacal, humongous destruction of life systems on Earth, made possible by capitalism.
I define capitalism as the unshakable, irreducible, codependent, complementary, synergistic bond between the spheres of property, power, and capital. I call them spheres to suggest dimensionality and complexity. Inside each sphere there is self-contradiction, collusion, inconsistency.
Capitalists primarily use the following tools to operate the deceitful game of economic freedom: the doctrine of proportionality, the doctrine of dispossession, and the doctrine of hierarchies. I call them doctrines because, as some dictionaries say, a doctrine is a principle or body of principles presented for acceptance or belief, as by a religious, political, scientific, or philosophic group. These three doctrines (likely I can find more if I drink enough coffee) are fed to us by the system as something that must not be questioned, as something coming from nature, as something absolute.
Capitalism has managed to survive this long on the back of these doctrines that have remained unchallenged for centuries. Let us unbox all of these elements, one by one, and match them with reality.
Property
Property is everything that can be owed by humans, directly or indirectly. Property can be things, land, buildings, ideas, money, promises, shares in a company, and so on. In society, it is largely accepted that property is represented not just by what is owned, but also by the social relationships, the laws, and the rules that come with what is owed. For example, you own your house, meaning it is yours, so it belongs to you. At the same time, your house comes with rules, such us, only you can sell it, only you can decide who lives in it, only you can make changes to it, only you have the right to refuse others to enter your house. These are some of the rights that come with your property.
You also have obligations: to pay tax on your property, to respect building codes, to limit the size of your property by not extending over the property of your neighbour, to maintain its quality so it does not harm others, and so on. Each kind of property comes with rights and obligations.
Power
Power has three elements: (1) the ability to cause something to happen according to your will, (2) the social status that permits you to express this ability, (3) a network of humans that have a common interest. Mind you, this definition is in the context of capitalism, and it is the way in which capitalism understands power.
When the CEO of a car manufacturing company, let us call him Aeron Tusk, wants to build an electric vehicle that uses tomato juice as fuel, he then certainly has the ability to cause that to happen by ordering his factory minions to buy as many tomatoes as they can, design a battery that runs on tomato juice, and launch a marketing campaign for the first vegetarian car in history. Aeron Tusk also has the social status that allows him to do this, which implies the title as CEO, the social recognition he enjoys, the relationships he has with creditors and so on. Aeron Tusk also belongs to networks of humans, namely the shareholders of Tusk Enterprises, and the Friends of Economic Freedom.
Capital
Capital is whatever is used in the production of goods and services, roughly speaking. There is a huge literature discussing what capital is and isn’t, which is beyond my scope here. In my scheme, capital is something different than property. Some property can become capital, for example when you use your personal savings to invest into a startup, or when you use your garage as the assembly line for your startup of AI-powered running shoes. Some property is not capital, such as your house where you live when you do not use it to produce goods and services.
If I work from home for a company, does my home count as capital for that company? One can argue yes, and that’s why you can write off some of your expenses for working from home, if the government allows you to do it. One can also argue no, because that company does not own your home. The lines between property and capital can sometimes be blurry, but we are still talking about two very different elements.
Growth
The eye of the trinity, is what I call growth, also known as the growth imperative or the profit motive. Capitalism has evolved as system that depends on its perpetual expansion. Growth is the core desire of all capitalists. In fact, I would even dare to say that it is not profit that capitalists seek, but this perpetual expansion of their business. There are numerous examples of corporations that have functioned for many years without turning a profit, and still operate fine. This was possible due to the expansion of their market share and their operations.
Growth was born from the desire of some of our ancestors to accumulate wealth without limit. Growth is what motivated kings, lords, and empires. Deep into the soul of capitalism is a desire to climb into the infinite heaven, to bathe into the grace of the divine. Most capitalists do not think like that anymore, yet they maintained the obsession with limitless expansion, while completely eviscerating from their minds questions about morality. It is no surprise that the vast majority of the super rich do not show empathy for 99% of humans, and behave like psychopaths. Growth is an incurable addiction for the super rich, and an unquenched desire for the masses that want to emulate the elites.
Vlad Bunea
Vlad Bunea is a video essayist, economist, author, and activist based in Toronto. He is a founding member of Degrowth Collective and the International Degrowth Network. His most recent book is The Urban Dictionary of Very Late Capitalism, and his upcoming book is Degrowth of Humans and Sheep.
Image courtesy of Vlad Bunea
For a while I have been talking on this channel about a heterodox definition of capitalism. A definition that does not discuss capitalism to be mainly about free markets, private ownership of the means of production, economic freedom, or supply and demand. My definition is built as an x-ray machine. It’s meant to help you see through the web of lies, deceit, narratives, political speeches, corporate talk, business media talk, marketing ploys and cultural delusions that maintain the dominance of capitalism. This simple definition also wants to focus your attention on the unprecedented, megalomaniacal, humongous destruction of life systems on Earth, made possible by capitalism.
I define capitalism as the unshakable, irreducible, codependent, complementary, synergistic bond between the spheres of property, power, and capital. I call them spheres to suggest dimensionality and complexity. Inside each sphere there is self-contradiction, collusion, inconsistency.
Capitalists primarily use the following tools to operate the deceitful game of economic freedom: the doctrine of proportionality, the doctrine of dispossession, and the doctrine of hierarchies. I call them doctrines because, as some dictionaries say, a doctrine is a principle or body of principles presented for acceptance or belief, as by a religious, political, scientific, or philosophic group. These three doctrines (likely I can find more if I drink enough coffee) are fed to us by the system as something that must not be questioned, as something coming from nature, as something absolute.
Capitalism has managed to survive this long on the back of these doctrines that have remained unchallenged for centuries. Let us unbox all of these elements, one by one, and match them with reality.
Property
Property is everything that can be owed by humans, directly or indirectly. Property can be things, land, buildings, ideas, money, promises, shares in a company, and so on. In society, it is largely accepted that property is represented not just by what is owned, but also by the social relationships, the laws, and the rules that come with what is owed. For example, you own your house, meaning it is yours, so it belongs to you. At the same time, your house comes with rules, such us, only you can sell it, only you can decide who lives in it, only you can make changes to it, only you have the right to refuse others to enter your house. These are some of the rights that come with your property.
You also have obligations: to pay tax on your property, to respect building codes, to limit the size of your property by not extending over the property of your neighbour, to maintain its quality so it does not harm others, and so on. Each kind of property comes with rights and obligations.
Power
Power has three elements: (1) the ability to cause something to happen according to your will, (2) the social status that permits you to express this ability, (3) a network of humans that have a common interest. Mind you, this definition is in the context of capitalism, and it is the way in which capitalism understands power.
When the CEO of a car manufacturing company, let us call him Aeron Tusk, wants to build an electric vehicle that uses tomato juice as fuel, he then certainly has the ability to cause that to happen by ordering his factory minions to buy as many tomatoes as they can, design a battery that runs on tomato juice, and launch a marketing campaign for the first vegetarian car in history. Aeron Tusk also has the social status that allows him to do this, which implies the title as CEO, the social recognition he enjoys, the relationships he has with creditors and so on. Aeron Tusk also belongs to networks of humans, namely the shareholders of Tusk Enterprises, and the Friends of Economic Freedom.
Capital
Capital is whatever is used in the production of goods and services, roughly speaking. There is a huge literature discussing what capital is and isn’t, which is beyond my scope here. In my scheme, capital is something different than property. Some property can become capital, for example when you use your personal savings to invest into a startup, or when you use your garage as the assembly line for your startup of AI-powered running shoes. Some property is not capital, such as your house where you live when you do not use it to produce goods and services.
If I work from home for a company, does my home count as capital for that company? One can argue yes, and that’s why you can write off some of your expenses for working from home, if the government allows you to do it. One can also argue no, because that company does not own your home. The lines between property and capital can sometimes be blurry, but we are still talking about two very different elements.
Growth
The eye of the trinity, is what I call growth, also known as the growth imperative or the profit motive. Capitalism has evolved as system that depends on its perpetual expansion. Growth is the core desire of all capitalists. In fact, I would even dare to say that it is not profit that capitalists seek, but this perpetual expansion of their business. There are numerous examples of corporations that have functioned for many years without turning a profit, and still operate fine. This was possible due to the expansion of their market share and their operations.
Growth was born from the desire of some of our ancestors to accumulate wealth without limit. Growth is what motivated kings, lords, and empires. Deep into the soul of capitalism is a desire to climb into the infinite heaven, to bathe into the grace of the divine. Most capitalists do not think like that anymore, yet they maintained the obsession with limitless expansion, while completely eviscerating from their minds questions about morality. It is no surprise that the vast majority of the super rich do not show empathy for 99% of humans, and behave like psychopaths. Growth is an incurable addiction for the super rich, and an unquenched desire for the masses that want to emulate the elites.
The doctrine of proportionality
Property and power communicate through the doctrine of proportionality, which basically says that the more property you have, the more power you have. Power increases in proportion with the size of your property. The most visible illustration of this is in the ownership of corporations that is divided into shares. You have probably heard about shareholder theory, or the Friedman doctrine. This theory says that the social responsibility of business is to increase its profits. Shareholders are the only group of humans responsible for this. How are they responsible? Through the way they exercise the power given by how many shares each shareholder owns.
You see, capitalist corporations are governed on a twisted version of democracy. Each shareholder has as many votes as the number of their eligible shares. Simply because shareholders vote on some decisions for the company, it is widely assumed this is ethical and democratic. It is as if property itself, namely the shares, carry the right of equal free speech, not the humans owning the share. It is as if the human owner behaves as a vehicle for its property. Jeff Bezos owns about 937 million Amazon shares, and because of that he has 937 million votes inside the company. One person with millions of metaphoric voices, millions of votes.
Unlike in political liberal democracy, where each adult citizen has one vote, in capitalist organisation, each share has one vote. The moral foundation of proportionality between property and power is dubious, murky, and feudal.
The doctrine of dispossession
Dispossession is how property is removed from its owner, by legal and illegal means, and turned into capital for the purpose of producing goods and services. We are most familiar with the illegal and immoral means by which property became capital, which are known under the name of colonialism. Some argue that even colonialism itself was in reality quite legal, because those settlers stole that land under the divine mandate of their kings. Back then it was known as the doctrine of discovery.
Dispossession can even be done with the consent of the owner of the property. For example, when a singer-songwriter uploads their song to Spotify, as their own property, that song becomes capital for Spotify because it is used to attract users to the platform, it is used to grow the platform, it is used to make a profit, which is not shared in fairness with the singer songwriter.
Big Tech is also dispossessing us of our personal data and is turning it into capital, every second. You can argue that once you put anything on social media, it no longer belongs to you, because it is in public domain. But is it truly so? Can someone really be deprived of their personal data, even if it is with their consent? How can personal data exist, without the person?
Big Tech has managed a very nifty legal pirouette to convince everybody that they use our property as their capital to produce services that are sold to advertisers for stupendous profit. The doctrine of dispossession has taken many forms in history, and continues to do so. We can barely imagine what the progress of AI can do to our property and person.
The doctrine of hierarchies
Capitalism cannot exist without hierarchies of humans, values, and networks. Power links to capital through the doctrine of hierarchies, which is about the quiet rules of closed doors, secret contracts, secret decisions, non disclosure agreements, obligations to obey the orders of your superiors, exclusive memberships to groups, lobby groups, organisational charts, top-down flow of decisions, top-down power over capital, top-down reward systems, top-down power of influence and importance.
Hierarchies are everywhere. A vast majority of humans accept them as a necessary evil for the good functioning of society. Many even defend hierarchies to the extent of doing harm to themselves, simply because humans do a trade-off in their minds, and quickly jump to the conclusion that hierarchies are the only way to establish relationships in society, the only way to maintain order and efficiency. Hierarchies are often thought to mirror competence and merit. Hierarchies are what the animal kingdom uses to weed out the less fit specimens. It feels easy and natural to accept this reality, doesn’t it?
The natural argument in favor of hierarchies is valid only to the point of natural selection. Beyond that, we have what is known as the human civilization, which on many occasions has proven that humans have elevated themselves above the constraints of natural selection. Creativity, discovery, science, language, all of these are evidence against the natural argument for hierarchies. Many civilizations have managed themselves with flat or no hierarchies.
Why do I Define Capitalism as a Trinity
Capitalism behaves like a religious cult because its foundations operate with elements and doctrines that are supposed to be taken on faith. Even if this model is legal to a large extent, it does not imply that is also moral, democratic, and fair. For over 400 years, this system has created a bunch of very few rich humans, has elevated millions out of poverty but just enough to keep them quiet and content, while it devasted landscapes, ecosystems, it ruined families and lives, it broke promises and bones, it expanded deserts and desolation.
How is The 3-Fold (Trinitarian) Model of Capitalism Useful to You
Let’s look at some examples of what capitalism does.
Talks between Boeing and the machinists union break down as strike nears the one-month mark. How to read this news through the lens of the capitalist trinity? The top shareholders of Boeing are David L. Calhoun, Stanley A. Deal, Theodore Colbert III, Vanguard Group Inc., BlackRock Inc., and Newport Trust Co. The power to run Boeing belongs to these people. The capital used by Boeing is… too complicated to mention. The profit motive forces Boeing to pay workers less. When unions challenge any of the doctrines that prop up the company, they are faced with retaliation.
US government considers a breakup of Google. This is an attempt from the state to reduce the size of property, power, and capital that has accumulated under a corporation. This is not an attempt to phase out the doctrines that run the corporation. Taming capitalists that seek monopoly power is something that some governments have attempted in history, yet none of these attempts have phased out capitalism itself. Only communist countries have shaken the system but only to the extent of replacing one set of owners with another, while maintaining the doctrines.
When you read any economic and business news you can easily notice how all the seven elements of the trinitarian model come to play. The most fundamental questions one should ask are: Who is the actual owner of a property? What is the capital being used? Who has the power? How do the doctrines operate? Finding the answers to these questions is the key to phasing out the system.
Our goal as a society ought to be to dismantle these doctrines and replace them with economic democracy. The growth imperative should be replaced with the wellbeing motive.
Some Conclusions and Thoughts for the Future
Lazy thinkers say that the opposite of capitalism is socialism or communism. No, it’s not. The opposite of capitalism is democracy. Even the USSR or [name your favorite socialist or communist country] used the trinity model to conduct their business, except that the actors in the system were the employees of the state. China, as a mixed system, also uses the trinity. In this way, we can say capitalism is not much different than totalitarian regimes. Capitalism only plays with different actors on more than one stage simultaneously.
Constructing a new economic system that actually serves the needs of all humans must begin with understanding what holds together the old system. Elements of a much better world are already visible at the outskirts of capitalism. Find them, learn them, use them, promote them. This is one among many. Or another one. Or another one. There is even a video…
This article was first posted on Vlad Bunea’s substack.
ZNetwork is funded solely through the generosity of its readers. Donate
Property and power communicate through the doctrine of proportionality, which basically says that the more property you have, the more power you have. Power increases in proportion with the size of your property. The most visible illustration of this is in the ownership of corporations that is divided into shares. You have probably heard about shareholder theory, or the Friedman doctrine. This theory says that the social responsibility of business is to increase its profits. Shareholders are the only group of humans responsible for this. How are they responsible? Through the way they exercise the power given by how many shares each shareholder owns.
You see, capitalist corporations are governed on a twisted version of democracy. Each shareholder has as many votes as the number of their eligible shares. Simply because shareholders vote on some decisions for the company, it is widely assumed this is ethical and democratic. It is as if property itself, namely the shares, carry the right of equal free speech, not the humans owning the share. It is as if the human owner behaves as a vehicle for its property. Jeff Bezos owns about 937 million Amazon shares, and because of that he has 937 million votes inside the company. One person with millions of metaphoric voices, millions of votes.
Unlike in political liberal democracy, where each adult citizen has one vote, in capitalist organisation, each share has one vote. The moral foundation of proportionality between property and power is dubious, murky, and feudal.
The doctrine of dispossession
Dispossession is how property is removed from its owner, by legal and illegal means, and turned into capital for the purpose of producing goods and services. We are most familiar with the illegal and immoral means by which property became capital, which are known under the name of colonialism. Some argue that even colonialism itself was in reality quite legal, because those settlers stole that land under the divine mandate of their kings. Back then it was known as the doctrine of discovery.
Dispossession can even be done with the consent of the owner of the property. For example, when a singer-songwriter uploads their song to Spotify, as their own property, that song becomes capital for Spotify because it is used to attract users to the platform, it is used to grow the platform, it is used to make a profit, which is not shared in fairness with the singer songwriter.
Big Tech is also dispossessing us of our personal data and is turning it into capital, every second. You can argue that once you put anything on social media, it no longer belongs to you, because it is in public domain. But is it truly so? Can someone really be deprived of their personal data, even if it is with their consent? How can personal data exist, without the person?
Big Tech has managed a very nifty legal pirouette to convince everybody that they use our property as their capital to produce services that are sold to advertisers for stupendous profit. The doctrine of dispossession has taken many forms in history, and continues to do so. We can barely imagine what the progress of AI can do to our property and person.
The doctrine of hierarchies
Capitalism cannot exist without hierarchies of humans, values, and networks. Power links to capital through the doctrine of hierarchies, which is about the quiet rules of closed doors, secret contracts, secret decisions, non disclosure agreements, obligations to obey the orders of your superiors, exclusive memberships to groups, lobby groups, organisational charts, top-down flow of decisions, top-down power over capital, top-down reward systems, top-down power of influence and importance.
Hierarchies are everywhere. A vast majority of humans accept them as a necessary evil for the good functioning of society. Many even defend hierarchies to the extent of doing harm to themselves, simply because humans do a trade-off in their minds, and quickly jump to the conclusion that hierarchies are the only way to establish relationships in society, the only way to maintain order and efficiency. Hierarchies are often thought to mirror competence and merit. Hierarchies are what the animal kingdom uses to weed out the less fit specimens. It feels easy and natural to accept this reality, doesn’t it?
The natural argument in favor of hierarchies is valid only to the point of natural selection. Beyond that, we have what is known as the human civilization, which on many occasions has proven that humans have elevated themselves above the constraints of natural selection. Creativity, discovery, science, language, all of these are evidence against the natural argument for hierarchies. Many civilizations have managed themselves with flat or no hierarchies.
Why do I Define Capitalism as a Trinity
Capitalism behaves like a religious cult because its foundations operate with elements and doctrines that are supposed to be taken on faith. Even if this model is legal to a large extent, it does not imply that is also moral, democratic, and fair. For over 400 years, this system has created a bunch of very few rich humans, has elevated millions out of poverty but just enough to keep them quiet and content, while it devasted landscapes, ecosystems, it ruined families and lives, it broke promises and bones, it expanded deserts and desolation.
How is The 3-Fold (Trinitarian) Model of Capitalism Useful to You
Let’s look at some examples of what capitalism does.
Talks between Boeing and the machinists union break down as strike nears the one-month mark. How to read this news through the lens of the capitalist trinity? The top shareholders of Boeing are David L. Calhoun, Stanley A. Deal, Theodore Colbert III, Vanguard Group Inc., BlackRock Inc., and Newport Trust Co. The power to run Boeing belongs to these people. The capital used by Boeing is… too complicated to mention. The profit motive forces Boeing to pay workers less. When unions challenge any of the doctrines that prop up the company, they are faced with retaliation.
US government considers a breakup of Google. This is an attempt from the state to reduce the size of property, power, and capital that has accumulated under a corporation. This is not an attempt to phase out the doctrines that run the corporation. Taming capitalists that seek monopoly power is something that some governments have attempted in history, yet none of these attempts have phased out capitalism itself. Only communist countries have shaken the system but only to the extent of replacing one set of owners with another, while maintaining the doctrines.
When you read any economic and business news you can easily notice how all the seven elements of the trinitarian model come to play. The most fundamental questions one should ask are: Who is the actual owner of a property? What is the capital being used? Who has the power? How do the doctrines operate? Finding the answers to these questions is the key to phasing out the system.
Our goal as a society ought to be to dismantle these doctrines and replace them with economic democracy. The growth imperative should be replaced with the wellbeing motive.
Some Conclusions and Thoughts for the Future
Lazy thinkers say that the opposite of capitalism is socialism or communism. No, it’s not. The opposite of capitalism is democracy. Even the USSR or [name your favorite socialist or communist country] used the trinity model to conduct their business, except that the actors in the system were the employees of the state. China, as a mixed system, also uses the trinity. In this way, we can say capitalism is not much different than totalitarian regimes. Capitalism only plays with different actors on more than one stage simultaneously.
Constructing a new economic system that actually serves the needs of all humans must begin with understanding what holds together the old system. Elements of a much better world are already visible at the outskirts of capitalism. Find them, learn them, use them, promote them. This is one among many. Or another one. Or another one. There is even a video…
This article was first posted on Vlad Bunea’s substack.
ZNetwork is funded solely through the generosity of its readers. Donate
Vlad Bunea
Vlad Bunea is a video essayist, economist, author, and activist based in Toronto. He is a founding member of Degrowth Collective and the International Degrowth Network. His most recent book is The Urban Dictionary of Very Late Capitalism, and his upcoming book is Degrowth of Humans and Sheep.
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