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I see analogy between capitalism and feudalism in how some people defend rich founders and owners of private companies. In feudalism, it was common to ascribe

by js8 7y ago

I see analogy between capitalism and feudalism in how some people defend rich founders and owners of private companies. In feudalism, it was common to ascribe the collective success of a nation (or a smaller, land-owning group of people in a given region) to a single individual, the feudal lord. He had the ultimate (and hereditary) authority over the operations of the group, by virtue of successfully coordinating the defense of the group against external threats. In modern (19th to 21st century) private companies, there is a similar dynamic. There is founder, who is ascribed unlimited power within the domain of his private company, just by the virtue of coordinating its expansion. (He "deserves it" because he "took the risks".) And this power is hereditary - he can decide to pass the ownership of the company to his own descendants. Sure, the powers of modern capital owners over lives of people are much smaller than in feudalism. But the arguments used to justify the power of capital owners over the operations (and profit distribution) in the company are in principle the same as those used to defend feudal lordship. In the political domain, humans eventually wisened up and decided that feudal lords should be replaced with democratic republic, because success of a nation is a collective effort, and so the decision making should also be done collectively. I think this will eventually happen to founders in capitalism too.

zaroth 7y ago
There is a system where it works more like the way you are suggesting -- it's called communism. The key reason why capitalism isn't "Feudalism 2.0" is because companies compete in a marketplace against each other, and there is freedom of mobility between employees across those companies. So maybe you could say that anti-trust law is a key component to ensure that your analogy is false.
- js8 7y ago
  I think you misunderstood my argument. I am not defending a particular system (and almost certainly not communism). I am pointing out that same arguments used to defend the privileges of capitalists were used to defend feudal privileges. The feudal lords also competed with each other. The freedom of mobility is not relevant if your only choice is just another feudal lord.
  - zaroth 7y ago
    > But the arguments used to justify the power of capital owners over the operations (and profit distribution) in the company are in principle the same as those used to defend feudal lordship. It's a neat metaphor in a storybook sort of way, which is why it seems like you are making a political point and not a economic argument. > The freedom of mobility is not relevant if your only choice is just another feudal lord. There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear. > In the political domain, humans eventually wisened up and decided ... I think this will eventually happen to founders in capitalism too. I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves. Well, aside from the ~50% which goes to taxes.
    - js8 7y ago
      "which is why it seems like you are making a political point and not a economic argument" I am making an argument that the principal justification for power of these individuals is the same. It's neither strictly political nor strictly economic argument. "There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear." Actually, you can decide to become a lord, it happens in mafias and gangs around the world till today. The lords in feudalism (unless it was inherited) rose from chieftains of tribes gaining more and more influence (often by using of violence) over more and more people. Just like starting a business, becoming a chieftain and lord is very risky. In fact riskier, because the stakes are higher, but also the rewards. Also, while there are small businesses in capitalism, yes, the core of it in practice are large businesses. And just like the lords, the owners of the large businesses are those who can either outsmart the other small owners, or just win the game of taking the risk. The issue I am talking about - winner (founder) takes all - is much more questionable in larger companies. The fact that there is no direct violence in economic competition between companies doesn't invalidate the comparison I am making. "I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves." I interpret the history the other way around. The capitalism only happened after people wisened up and figured that the republic is better than monarchy, in the political sphere. This restricted the use of violence in competition for power, and allowed the companies (and their owners) to rise in the economic competition. But the question why should somebody keep unlimited and indefinite control over something (be it company or state) just by virtue of organizing people around creation of that something still stands.

by js8 7y ago

zaroth 7y ago

There is a system where it works more like the way you are suggesting -- it's called communism. The key reason why capitalism isn't "Feudalism 2.0" is because companies compete in a marketplace against each other, and there is freedom of mobility between employees across those companies. So maybe you could say that anti-trust law is a key component to ensure that your analogy is false.

js8 7y ago
I think you misunderstood my argument. I am not defending a particular system (and almost certainly not communism). I am pointing out that same arguments used to defend the privileges of capitalists were used to defend feudal privileges. The feudal lords also competed with each other. The freedom of mobility is not relevant if your only choice is just another feudal lord.
- zaroth 7y ago
  > But the arguments used to justify the power of capital owners over the operations (and profit distribution) in the company are in principle the same as those used to defend feudal lordship. It's a neat metaphor in a storybook sort of way, which is why it seems like you are making a political point and not a economic argument. > The freedom of mobility is not relevant if your only choice is just another feudal lord. There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear. > In the political domain, humans eventually wisened up and decided ... I think this will eventually happen to founders in capitalism too. I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves. Well, aside from the ~50% which goes to taxes.
  - js8 7y ago
    "which is why it seems like you are making a political point and not a economic argument" I am making an argument that the principal justification for power of these individuals is the same. It's neither strictly political nor strictly economic argument. "There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear." Actually, you can decide to become a lord, it happens in mafias and gangs around the world till today. The lords in feudalism (unless it was inherited) rose from chieftains of tribes gaining more and more influence (often by using of violence) over more and more people. Just like starting a business, becoming a chieftain and lord is very risky. In fact riskier, because the stakes are higher, but also the rewards. Also, while there are small businesses in capitalism, yes, the core of it in practice are large businesses. And just like the lords, the owners of the large businesses are those who can either outsmart the other small owners, or just win the game of taking the risk. The issue I am talking about - winner (founder) takes all - is much more questionable in larger companies. The fact that there is no direct violence in economic competition between companies doesn't invalidate the comparison I am making. "I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves." I interpret the history the other way around. The capitalism only happened after people wisened up and figured that the republic is better than monarchy, in the political sphere. This restricted the use of violence in competition for power, and allowed the companies (and their owners) to rise in the economic competition. But the question why should somebody keep unlimited and indefinite control over something (be it company or state) just by virtue of organizing people around creation of that something still stands.