Whatever the ambiguous word “Capitalism” actually means, it is given way too much credit for socio-economic creativity and productiveness. Capitalism is first of all an ISM, a set of revered notions by which some people understand and explain their version of the world we inhabit. Versions of the world are abstract. They “envision” the world with at best partial accuracy. We don’t all inhabit the same “world.” Visions inhabit us.
Logical comparison of reports, hypotheses and theories (visions) gives us a dialectic of “ideas,” notions that can be ascertained and validated only by scientific observation, recollection and imaginatively designed experiments which start from questions and result in possible answers that raise more questions, all requiring confirmation or invalidation. It breeds a continuing cycle of exploration and determination.
Joseph Shumpeter’s thought reminds me of Vivaldi’s music. Complex. Periodic. Mingling light and dark. Shiftings from stately to dancingly airy. Finely conceived. Not universal, not all-embracing. Confined to its background. But then, aren’t we all?
Capitalism is a “system” only within its -ISM. It is a chaos among more orderly subsystems. A potential musical-chairs of components.
One had as well credit economic improvements and growth to human inventiveness and accidental discoveries as to bless the fox’s den-digging and food-getting activity with the sacred name of Capitalism. Capital-ism as an imaginary system starts with some “capital.” What is the fox’s capital? Its own motility and neediness. Its senses and urges. A hole in the ground or hollow log. A cache of food left from yesterday’s lucky kill, hidden or buried. Today, for instance, many high-order foxes have buried their surplus and won’t let it back into useful circulation since it can’t draw much interest, though it may accumulate nutritious dividends in maggot, worm, grub and beetle.
As chaos, capitalism rides enterprise with investment in between banks and payments for overhead of building and equipment, then labor, material supply and cost of shipping the output to buyers. It only looks orderly because methodical systems are devised for managing all these functions. Actual chaos resides in the fact that few actions or results of transaction are strictly determined. Hence, the need for regulation.
Enterprises self-regulate internally but external “markets” require and demand external oversight and regulation, both for markets and for enterprises hopefully productive. Markets are made of human foxes looking to buy things that satisfy their cravings and hunger. If they find dissatisfaction from a producer’s actions or product, they militate political correction, either from mob behavior or call for government intervention and legislation as a means to enforce conditions of every kind from quality to terms of sale or return, complaint and redress, to advertising and taxes. Foxes object to what they feel is artificial confinement. Foxes are familial individuals, not individualists.
Capitalism seems endlessly flexible but its imagined form is rigidly intractable, scornful of change large or small, jealous of initiative not issuing from its own “head” or caput. Capitalism is subject to repeated hardening of the arteries. Capitalism does not make for change, creative or destructive. Only people do that, by means of better ideas. Capital resists ideas fully as much as it propounds them. Maybe it is the fox’s dirty tunnel.