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NJ Bridgewater
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The Elements of Capitalism
Capitalism is, basically
speaking, economic freedom. Within a capitalist economy, according to Bast and
Walberg (2013), “there is no conscious authority in charge of operating or
managing the economy”, with authority, instead, being “diffused throughout the
system.”[1]
In other words, the economy is not managed by a central authority, as in socialism,
nor are the means of production controlled by the government. It is characterised,
they argue, by three institutions: private property, the free market, and the
rule of law, all of which are essential for capitalism to function.[2]
This conception relates closely to the ideas of John Locke (1632 – 1704), the
famous English philosopher and physician known as the “Father of Liberalism”,
who argued that man (i.e. the individual, regardless of gender) is born “with a
title to perfect freedom” and that each individual has a natural right and
power “not only to preserve his property, that is, his life, liberty and
estate, against the injuries and attempts of other men”, but also the power to
endow government with the right to punish breaches of these natural rights.[3]
In other words, Locke argues that individuals have a natural right to property,
as well as a natural right to preserve that property and punish those who abuse
his natural rights. However, this power to judge and punish breaches of his
rights he has resigned “into the hands of the community”, which preserves these
rights for the populace, i.e. its members.[4]
It should be noted, here, of course, that by Liberalism is meant classical
Liberalism, i.e. the idea of individual freedom and liberty, contrasting with
the ideas of the modern Left, which now inclines more towards socialism, collectivism
and Cultural Marxism (i.e. the modern movement to undermine capitalism, Western
culture and the family structure based on Marxian ideas and concepts).
 |
| John Locke, Father of Liberalism [5] |
.jpg) |
| Thomas Hobbes, Author of The Leviathan[6] |
The rule of law may be defined to include the rules, “whereby every man may know, what Goods he may enjoy and what Actions he may doe, without being molested by any of his fellow Subjects”, referring to a code or system of law instituted by a sovereign power, which Thomas Hobbes (1588 – 1679), author of The Leviathan, also calls “propriety”, and the system in place which maintains these rules and adjudicates on any disputes.[7] Hobbes calls this latter authority “the Right of Judicature”, which belongs to the sovereign power of state, and which includes the right “of hearing and deciding all Controversies, which may arise concerning Law, either Civill, or naturall, or concerning Fact.”[8] The rule of law thus implies not only the existence of a code or system of laws (e.g. English common law and legislation), but also the sovereign power which makes these laws, and a judiciary which decides upon all matters legal and civil. A good description of the basis of the rule of law has been given by Plato in his aptly-named dialogue, Laws, wherein he states that the “the legislator has to be careful how the citizens make their money and in what way they spend it, and to have an eye to their mutual contracts and dissolutions of contracts, whether voluntary or involuntary: he should see how they order all this, and consider where justice as well as injustice is found or is wanting in their several dealings with one another; and honour those who obey the law, and impose fixed penalties on those who disobey…”[9] He also comments on those who administer the law justly, saying that “the lawgiver reviewing his work, will appoint guardians to preside over these things,—some who walk by intelligence, others by true opinion only, and then mind will bind together all his ordinances and show them to be in harmony with temperance and justice, and not with wealth or ambition.”[10] This is the basis of good governance and a basic condition of capitalism and free societies. Furthermore, the rule of law cannot exist without justice, which, Plato says, is “a thing more precious than many pieces of gold” and “the excellence of the soul by which happiness is attained.”[11] The Qur’ān, the great centre-piece and inspirer of the Islamic Golden Age, likewise exhorts its adherents: “O ye who believe! stand fast to justice”[12] and “give back your trusts to their owners, and when ye judge between men… judge with fairness.”[13] It is only by establishing the rule of law and just institutions that lasting wealth and prosperity can be established.
The earliest human
communities, being based on the hunter-gatherer model already referred to,
contained all of the elements of capitalism referred to above. The individual
members of the community each had private property, in the form of various
collectibles and tools, while they also shared goods and services with their
next of kin. They also engaged in free market trading with other bands and
clans, usually once a year during an aggregation of clans or festival. They
also had norms and rules which allowed them to function, punish wrongdoing and
ensure the rights of each individual within the community. These are the basic
elements of capitalism, and they were present in the earliest human communities
in East Africa, long before mankind made the bold move to expand and seek out
new shores and climes in distant lands. This system contrasts quite strongly
with feudalism—a much later system in which feudal lords owned all the land and
serfs worked as virtual slaves for the landowners. The feudal system was the
basis of the European economy during the Middle Ages and Renaissance, and
continued in Russia until relatively recent times, when serfdom was abolished
by Tsar Alexander II in 1861.[14]
Serfdom in England only came to an end with the Tenures Abolition Act 1660,
during the lifetime of John Locke, passed by the Convention Parliament shortly
after the restoration of King Charles II to the throne.[15]
Feudalism was already on the decline though, having flourished from circa 700
AD until the first quarter of the 14th century.[16]
 |
| A cleric, a knight and a peasant under feudalism[17] |
Capitalism also contrasts
strongly with communism and socialism, as practised by North Korea and
Venezuela, where the human cost of economic ruination, privation and
authoritarian control is still keenly and bitterly felt. Thankfully, however,
from the 17th century onwards, modern capitalism has spread widely,
along with the principles of private property, the free market and free trade,
along with the rule of law. This incredible expansion is largely due to the
growth and spread of the British Empire, as well as its former colonies, e.g.
the United States of America, accompanied by a huge boom in technology,
innovation and industry which have encompassed the world since the 19th
century. The British Empire also helped to initiate and spread the benefits of
the Industrial Revolution. In 1820, 75% of mankind lived on less than a dollar
a day—today, only about 20% live under that amount, which is the effect of mass
economic growth, free market capitalism and the spread of new sciences and
technology.[18] As
the Cato Institute notes in its 2017 Economic Freedom of the World Annual
Report, worldwide income inequality and the poverty rate both declined
during the last two decades of the 20th century, and this has
accelerated since 2000, leading to even greater economic prosperity for people
around the world.[19]
This is driven, they argue, primarily by gains in sound money and trade
liberalization. By sound money, they mean money with “relatively stable
purchasing power across time”, i.e. money which doesn’t erode in value through
runaway inflation, and trade liberalization means reducing the barriers to
trade internationally.[20]
In both cases, basic conditions for a thriving capitalist economy are created,
leading to greater economic growth and reducing economic disparities and
extreme poverty in its wake. Furthermore, according to the World Bank, the
world’s extreme poverty rate had been halved from 1990 to 2010.[21]
The situation is still not great, with 1.29 billion living below the extreme
poverty rate of $1.25 per day, but the situation is improving, and this is due,
in large part, to the three elements of capitalism already mentioned: private
property rights, a free market and the rule of law. Where these elements are
missing, extreme poverty predominates, and, where they are found, extreme poverty
decreases, and economic growth prevails. Relative poverty will always exist, as
complete equality is impossible, but extreme poverty does not have to, and it
is on its way out.
Ancient Cities,
Agriculture and Wealth
We have mentioned both the
ancient epochs of mankind’s pre-history and modern capitalism, but what about
what happened in between? We know that there are still hunter-gatherer groups
such as the San people, i.e. the various Khoesān-speaking groups who were indigenous
to Southern Africa, including South Africa and Botswana, and there are also
urban, First World societies which feel the full benefits of the free market
economy, and there is everything in between, including communist states with
self-inflicted economic ruin and poverty. But it was not always so, and
mankind’s long rise from the level of primitive subsistence has spanned a
relatively short span in the total length of human existence, as well as in the
much longer, and, indeed, immense existence of the Earth which is our home. As
Israeli writer Yuval Noah Harari writes in his book, Sapiens: A Brief
History of Humankind, humans—under which umbrella he includes Homo erectus,
Homo ergaster and the Neanderthals—lived and subsisted by gathering plants and
hunting wild animals for millions of years.[22]
This changed, he notes, about 10,000 years ago, when Homo sapiens, i.e. modern
man, did something extraordinary—they began devoting all their time and effort
to cultivating certain plants and domesticating various species of animals,
providing greater nutrition and a higher standard of living than they ever
could have previously contemplated or imagined.[23]
In the Old World, at least, agriculture began circa 9,500 – 8,500 BC in a
region spanning south-eastern Turkey, western Persia and the Levant, with wheat
and goats being domesticated about 9,000 BC, peas and lentil around 8,000 BC,
olive trees around 5,000 BC, horses around 4,000 BC and grapevines around 3,500
BC.[24]
All of these developments were extraordinary in their impact, allowing mankind
to spur ahead in development and begin to create the building blocks of
civilization, including the accumulation of both knowledge and capital.
Harari makes the playful
suggestion that plant species domesticated Homo sapiens, rather than vice
versa, since the life of a hunter-gatherer was more stimulating, they had
greater knowledge of the animals they hunted and plants they gathered, and life
became more—not less—difficult for the average man.[25]
There is some truth to this statement. Some kinds of knowledge were lost,
humans are naturally explorers and need stimulation, which farming the same
field day in and day out does not necessarily provide, and pampered elites did
eventually emerge. This narrative ignores, however, the constant fight for
survival and struggle of the hunter-gatherer lifestyle, the precariousness of
life on the savannah and open plain, and the many and numerous benefits that
civilization has offered to mankind, including a much higher standard of living,
more abundant wealth and knowledge, and freedom from the constant necessity to
forage and search for food afforded by differentiating labour. Nevertheless, he
does acknowledge the long-term benefits of the Agricultural Revolution,
including better protection against wild animals, rain and cold, as well as
more food per unit of territory, allowing the species to expand and multiply at
a much faster rate.[26]
While Harari downplays these benefits, and feels that the hunter-gatherer
lifestyle was preferable, I think most people at the time were glad that they
were able to have more children, put a roof over their heads, feed them more
reliably, and not have to wander miles upon miles hunting for wild animals,
woolly mammoths and other dangerous creatures, while constantly at fear of
being ripped to shreds by a lion, bear, wolf or other vicious predator. I think
Harari’s arguments, while romantic to modern readers, might fall on deaf ears
if presented to our ancient forebears.
_(14577028168).jpg) |
| Ancient Egyptian Farmers[27] |
Agriculture led to the next
inevitable step in the rise of mankind: the development of villages. By about
8,500 BC, the Middle East was dotted with numerous permanent villages, such as
Jericho, with permanent settlers who cultivated plants and tended domesticated
animals.[28]
The Middle East, and wider Fertile Crescent, were uniquely suited for the
development of agriculture and permanent settlements, as noted by Jared Diamond
in Guns, Germs and Steel: The Fates of Human Societies. This is due,
partly, he argues, to the Mediterranean climate, which is characterized by
mild, wet winters and long, dry summers, allowing for cereals and pulses to
develop.[29]
The abundant flora of the Fertile Crescent also allows for annual harvests of
nearly a ton of seeds per hectare, resulting in some 50 kilocalories of food
energy from wild cereals for each kilocalorie of work, and seeds could be
stored for use later on in the year.[30]
This allowed for some hunter-gatherers to settle down before they even
cultivated plants.[31]
When agriculture did develop, eight founder crops were domesticated, i.e. emmer
wheat, einkorn wheat, barley, lentils, peas, chickpeas, bitter vetch and flax.[32]
They were also able to utilize four domestic animals as food, along with the
three cereals (emmer wheat, einkorn wheat, and barley) and four pulses (lentil,
peas, chickpeas, and bitter vetch) already mentioned.[33]
By 6,000 BC, there were already societies in the Fertile Crescent which were
almost completely dependent on crops and domestic animals. In other words, they
were not that different from most people today, and they ate essentially the
same basic foods that we eat.[34]
One can consider that when dipping into one’s chickpea-based hummus with a loaf
of barley bread and some lentil soup. With the development of agriculture and
permanent settlement, and a growing human population, villages, in turn, grew
and became larger. As houses became permanent, and more and more people swelled
the paths and spaces between each house, greater social organization became
necessary. This was provided largely by what has come to be known as
‘religion’. The topic of religion, faith, Dharma or Dhamma, I have discussed in
greater detail in my previous book, Mindfulness:
Five Ways to Achieve Real Happiness, True Knowledge and Inner Peace,
which outlines Five ‘Ways to Be’, in order to achieve a life of balance and
equanimity, peace and fulfilment.[35]
I have also addressed this topic in the second book of the series, Meditation:
Five Ways to Master your Mind, Body and Spirit, which will be published soon.
For the purposes of this essay, however, let us consider the topic of religion
in a historical sense.
 |
| Göbekli Tepe, Anatolia[36] |
We know from archaeologists
that the earliest large human settlement found to date, Göbekli Tepe, located
in Anatolia, which dates to 9500 BC, at a time when the inhabitants would have
been hunter-gatherers, did not serve any practical or utilitarian purpose.[37]
We can speculate, therefore, that the structure was primarily cultural and
religious in focus.[38]
Perhaps built at the command some ancient Prophet, Priest or Seer, Göbekli Tepe
could have served as a meeting-place for thousands of foragers and hunters to
meet together, cooperate and, perhaps, worship or engage in spiritual
practices. Religion and spirituality, then, go to the heart to human history,
and are integral to the development of civilization. As Harari points out, the
location of Göbekli Tepe is also significant and telling, as einkorn wheat is
believed to have originated in the Karaçadag hills, which are a mere thirty
kilometres from the ancient temple-settlement.[39]
Is this a mere coincidence, or do the ancient origins of organized religion,
agriculture and human settlement go hand in hand? This question can be
discussed in the context of the origins of the first cities in Mesopotamia,
which centred around temples, and which were organized and managed by
priest-kings.
[1] See:
Joseph L. Bast, Herbert J. Walberg (2013) Education and Capitalism: How Overcoming
Our Fear of Markets and Economics Can Improve (Stanford, Calif.: Hoover
Institution Press), p. 85.
[2] See:
Bast & Walberg (2013), pp. 85 – 86.
[3] See:
John Locke (1690) Two Treatises of Government (London: Printed for
Awnsham Churchill), The Second Treatise of Civil Government, Chapter II. URL: https://faculty.history.wisc.edu/sommerville/367/locke%20decindep.htm
(accessed 02/07/2018).
[4] See:
Locke (1690).
[5] Image
source: Thomas Hobbes, by John Michael Wright (1617 – 1694) – National Portrait
Gallery: NPG 225 (public domain), uploaded 3 August 2013. URL: https://upload.wikimedia.org/wikipedia/commons/d/d8/Thomas_Hobbes_%28portrait%29.jpg
(accessed 04/07/2018).
[6] Image
source: John Locke portrait from the Library of Congress (public domain),
uploaded 3 August 2013. URL: https://upload.wikimedia.org/wikipedia/commons/f/fa/Locke-John-LOC.jpg
(accessed 02/07/2018).
[7] Thomas
Hobbes (1651) The Leviathan, or, The Matter, Forme and Power of a
Common-Wealth Ecclesiastical and Civill (London: Printed for Andrew
Crooke), Part II, Chapter XVIII, 7. URL: https://www.gutenberg.org/ebooks/3207
(accessed 04/07/2018).
[8] Hobbes
(1651), Part II, Chapter XVIII, 8.
[9] See:
Plato (author), Benjamin Jowett (translator) The Dialogues of Plato,
translated into English (Oxford: Oxford University Press), Laws, Book I.
URL: https://www.gutenberg.org/files/1750/1750-h/1750-h.htm (accessed
04/07/2018).
[10] See:
Plato (author), Jowett (translator), Laws, Book I.
[11] See:
Plato (author), Benjamin Jowett (translator) The Dialogues of Plato,
translated into English (Oxford: Oxford University Press), The Republic,
Book I. URL: http://oll.libertyfund.org/titles/plato-dialogues-vol-3-republic-timaeus-critias
(accessed 04/07/2018).
[12] See: J
M Rodwell (1861) The Koran (London: Williams and Norgate), 4:135.
[13] Qur’ān
4:58 (Rodwell translation).
[14] See:
Serfdom in Russia (Wikipedia article). URL: https://en.wikipedia.org/wiki/Serfdom_in_Russia
(accessed 02/07/2018 16:19 AST).
[15] See:
Tenures Abolition Act 1660 (Wikipedia article). URL: https://en.wikipedia.org/wiki/Tenures_Abolition_Act_1660
(accessed 02/07/2018 16:23 AST).
[16] See:
Feudalism in England (Wikipedia article). URL: https://en.wikipedia.org/wiki/Feudalism_in_England
(accessed 02/07/2018 16:23AST).
[17] Image
source: An inhabited initial from a 13th-century French text representing the
tripartite social order of the Middle Ages: the ōrātōrēs (those who pray
– clerics), bellātōrēs (those who fight – knights, that is, the
nobility), and labōrātōrēs (those who work – peasants and members of the
lower middle class). Author unknown (public domain), uploaded 5 September 2012.
URL: https://commons.wikimedia.org/wiki/Category:Feudalism#/media/File:Cleric-Knight-Workman.jpg
(accessed 02/07/2018).
[18] See:
Ian Vásquez (2001) Ending Mass Poverty, Cato Institute. It originally
appeared in Economic Perspectives, September 4, 2001 URL: https://www.cato.org/publications/commentary/ending-mass-poverty
(accessed 02/07/2018).
[19] See:
James Gwartney, Robert Lawson, Joshua Hall (2017) Economic Freedom of the
World: 2017 Annual Report (Cato Institute, Fraser Institute in Canada,
etc.), p. 19. Available online at: https://www.cato.org/economic-freedom-world
(accessed 02/07/2018).
[20] See:
Gwartney et al (2017), p. 5.
[21] See:
Sudeep Reddy (2012) World’s Extreme Poverty Cut in Half Since 1990, The Wall
Street Journal, Feb 29, 2012 11:13 am ET. URL: https://blogs.wsj.com/economics/2012/02/29/worlds-extreme-poverty-cut-in-half-since-1990/
(accessed 02/07/2018).
[22] See:
Yuval Noah Harari (2014) Sapiens: A Brief
History of Humankind (New York: Harper Perennial), p. 70.
[23] See:
Harari (2014).
[24] See:
Harari (2014).
[25] See:
Harari (2014).
[26] See:
Harari (2014).
[27] Image
source: The dawn of civilization: Egypt and Chaldea, G. Maspero (1897) (public
domain). URL: https://upload.wikimedia.org/wikipedia/commons/e/e9/The_dawn_of_civilization-_Egypt_and_Chaldaea_%281897%29_%2814577028168%29.jpg
(accessed 04/09/2018).
[28] See:
Harari (2014).
[29] See:
Jared Diamond (1999, 1997) Guns, Germs and Steel: The Fates of Human
Societies (New York: W.W. Norton & Co.), p. 135.
[30] See:
Diamond (1997), p. 136.
[31] See:
Diamond (1997), p. 136.
[32] See:
Diamond (1997), p. 141.
[33] See:
Diamond (1997), p. 142.
[34] See:
Diamond (1997), p. 142.
[35] See: NJ
Bridgewater (2017) Mindfulness: Five Ways to Achieve Real Happiness, True
Knowledge and Inner Peace (Five Ways to Be, Volume 1) (Abergavenny, UK:
Jaha Publishing).
[36] Image
source: Göbekli Tepe, Şanlıurfa, uploaded by Teomancimit, 6 September 2011(CC
BY-SA 3.0). URL: https://upload.wikimedia.org/wikipedia/commons/d/d5/G%C3%B6bekli_Tepe%2C_Urfa.jpg
(accessed 04/07/2018). For more information on the license, see: https://creativecommons.org/licenses/by-sa/3.0/
(accessed 04/07/2018).
[37] See:
Harari (2014).
[38] See:
Harari (2014).
[39] See:
Harari (2014).
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