Ritchie on capitalism

But let’s not pretend here: there is no such thing as inclusive capitalism. By definition capitalism is about the creation of inequality. In a capitalist system trade and industry are undertaken by private owners for profit, rather than by the state. Their goal is the accumulation of ever more resources under their control because that is the way they can ensure their survival. However, in a world where resources are finite this command over ever-increasing shares of resources inevitably means more and more will lose out as a consequence. You don’t have to be a Marxist to think that: you merely have to observe the world as it is. Marx forgot increasing productivity and technical innovation in his analysis…..

What? Marx forgot about increasing productivity and technical innovation?

Sirsly?

Umm, wasn’t it actually all about exactly that? The incredible increase in both brought about by industrial capitalism? To such an extent that pretty soon right now we will have beaten the economic question of scarcity and true communism will follow?

Is there no beginning to this man’s knowledge of economics?

21 comments on “Ritchie on capitalism

  1. “Their goal is the accumulation of ever more resources under their control because that is the way they can ensure their survival.”

    Sounds more like the state to me.

  2. Marx assumed that technological progress would stop. As long as innovation took place, the factory owners could get away with replacing workers with machines. But at some point, they could no do so any more because everything would have been invented. Then they would have to squeeze wages.

    Or so I dimly remember.

  3. In many parts of the economy, the scarce resource is not Capital or materials, but ideas and critical thinking.

    So yes, in The Big Dick’s worldview these may well be *very* finite resources.

  4. “In a capitalist system trade and industry are undertaken by private owners for profit, rather than by the state”

    Really, that’s just the capitalist ‘system’ is it? Because it sounds to me like every human interaction since the dawn of time absent State imposition.

  5. @Ironman And helpfully in this formulation of the problem, the Capitalist has a motive, whereas the State has none.
    Public Choice Theory has left the building.

  6. @ Ironman
    “it sounds to me like every human interaction since the dawn of time absent State imposition.”
    Not quite. You have forgotten slavery and penal servitude. Maybe Murphy wants to reintroduce slavery to Britain.

  7. Marx thought capitalists would deliberately under produce to keep prices up and wages down. The state would not do this and so production would increase and there would be plenty for everyone. How did that work out again?

  8. john77

    “trade and industry are undertaken by private owners for profit, rather than by the state”

    Actually I think that covers owning and using slaves as well.

    And as Ritchie is so fond of telling us; you can’t do business without the help of the State. Yes indeed, Courageous States have been invading and enslaving and generously providing the conditions for its citizens to own slaves since the dawn of time. Hurrah for the Courageous State !

  9. @ Ironman
    I was referring to human interactions by the slaves who did not enjoy any profit: I think slaves are human (whether or not Murphy does). [Anecdote alert – one of things I liked about my ex-employer was that everyone from the CEO to the toilet cleaner called me “John”]. If you treat the slave as being part of the household, as Abraham did, then you are clearly correct; I was thinking of Murphy’s analysis and/or plantation slaves.
    ” Yes indeed, Courageous States have been invading and enslaving and generously providing the conditions for its citizens to own slaves since the dawn of time.”
    Well, depends on how you define “dawn of time” – if you mean “dawn of history” then you are right. Writing seems to start with tax collectors.
    It is worth noting that barter trade existed before the first state.

  10. @RlJ
    It was Adam Smith ,patron of this site, who said ” The monopolists ,by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise their emoluments, whether they consist in wages or profit, greatly above their natural rate.”

  11. DBC

    No sorry, you’ve lost me. I may be really simple here mate, but tell us what your point is please.

    In particular, what do you think Adam Smith meant by ‘effectual demand’ and ‘the natural price’?

  12. Which Smith quotation relies, of course, on having a monopoly (or sufficient dominance of some aspect of the market to allow you to set non-clearing market prices.) Marx was suggesting that any capitalist supplier would treat consumers as the enemy rather than competing against his fellow suppliers.

    Cosy cartels are hardly uncommon and monopolies were far more common in Smith’s day. But neither are limited to capitalist enterprises.

  13. Btw Noel

    Strange but, having had “lots” of meetings with pension funds, Ritchie and Colin Hines seem much less inclined to go to the unions and tell them their members savings should be expropriated by local government. As I say, strange that.

  14. Out of interest, can anyone think of an enduring monopoly that has existed other than by the virtue of a state enabling it.
    Subject of conversation recently & I was stumped if I could think of one.

  15. It’s interesting – I’ve never heard Communism (which he seems to be advocating) called ‘justice’ before. Tim asks ‘is there no beginning to this man’s knowledge of economics?’

    You could add science, philosophy, history, finance, politics, international relations, psychology, sociology (and probably a whole lot more) – indeed beyond knowledge of his own ‘fitness for office’, is there any beginning to his knowledge of anything? For someone of 56/57 to have gone through life picking up so little is downright embarrassing…

  16. bloke in spain – “Out of interest, can anyone think of an enduring monopoly that has existed other than by the virtue of a state enabling it.”

    De Beers?

  17. @ SMFS
    But the continuation of the De Beers monopoly was enabled (I think, but you may think helped) by Botswana and Russia. I was amazed when I visited Yakutsk in the mid-90s at their enthusiasm for Nick Oppenheimer – I had not previously been aware that he did anything except inherit control of De Beers but he personally went there to to negotiate an agreement to market their diamonds. [I was not allowed to visit until March because my team was only equipped to cope with temperatures down to -40C]. The implication was that he also gave them a much better deal than Moscow.

  18. @ BiS
    Apart from De Beers
    When I was young BPB had a monopoly in plasterboard (technical, and apart from the plasterboard produced by ICI to prevent pollution, absolute). Technically both Marley and Redland had a monopoly in roofing tiles.

  19. Did Marx actually omit increasing productivity or technical innovation from his analysis?

    If I recall correctly, part of Marx’s thinking was that increasing productivity and technical innovation were essential parts of the conditions that would lead to revolution and the downfall of capitalism.

    Isn’t that exactly why Marx thought that the most industrially advanced societies, like Britain, were ready for Communism and precisely why countries like Russia were not?

    Sorry, I seem to recall those two ideas being quite central to Marx’s analysis of capitalism…

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