Cooking the Books 1:The problem with capitalism

“The problem with capitalism”, former Canadian Prime Minister (1993-2003) Jean Chrétien told the Times (29 June), “is the capitalists. They don’t know when to stop. They want more and more.”

This is an astute observation from someone with considerable experience in running the political affairs of capitalism. Capitalists do behave in this way. They are always aiming to make as much money as they can for their business, and when they’re on a profit-making spree they don’t know when to stop. Which causes problems from time to time, notably crises of overproduction or overspeculation.

But why is this? Is it because capitalists are just greedy people? Marx offered an alternative explanation: that capitalists are “personifications of capital” and that, as units of capital are driven to expand, this is reflected in their behaviour:

 “The simple circulation of commodities – selling in order to buy – is a means of carrying out a purpose unconnected with circulation, namely, the appropriation of use-values, the satisfaction of wants. The circulation of money as capital is, on the contrary, an end in itself, for the expansion of value takes place only within this constantly renewed movement. The circulation of capital has therefore no limits. As the conscious representative of this movement, the possessor of money becomes a capitalist. His person, or rather his pocket, is the point from which the money starts and to which it returns. The expansion of value, which is the objective basis or mainpring of the circulation M-C-M, becomes his subjective aim, and it is only in so far as the appropriation of ever more and more wealth in the abstract becomes the sole motive of his operations, that he functions as a capitalist, that is, as capital personified and endowed with consciousness and a will. Use-values must therefore never be looked upon as the real aim of the capitalist;  neither must the profit on any single transaction. The restless never-ending process of profit-making alone is what he aims at.” (Capital, Vol 1, ch 4).

In other words, capitalists are greedy because they are in charge of units of capital. They can’t help it as capital accumulation is what capitalism is all about. Some internalise this and will be nasty people, especially the “self-made man” variety. But others behave like this only when running their business and outside this are alright.

Chrétien sees one of the roles of governments as to restrain capitalists from time to time in the best interest of all of them. As he put it, “You live with it, and you regulate them” (extended interview, Times, 1 July).

Capitalists and capitalist firms don’t like being regulated and spend huge sums of money lobbying to prevent this. They want a free hand to make profits in any way they can, without restrictions, or “red tape” as they call it. In the 19th century, as Marx pointed out in Capital, they so ruthlessly exploited the workforce by imposing long hours of work, that they risked the reproduction of future workers to make profits for them. The state had to intervene in the general capitalist interest and bring in the Factory Acts to restrain them.

What sort of society is it where those in charge of production are driven to be greedy and need restraining to stop them causing too much damage to their workers and to the environment?