Land, labor and capital
Many things which today are considered commodities within the ‘free-market’ paradigm are differently understood within an associative paradigm. For example: land, labor, and capital. The so-called ‘factors of production’ are seen as 'factors of price formation', essentially matters of right which simply border the economic realm on all sides. However, in the associative paradigm, these 'factors of price formation' do not fall into the hands of the state.
Land is part of the commons. It is our common heritage, a resource that, in a wider sense, belongs to all (including future generations, but, again, not to the State), and which needs to be entrusted by voluntary groups and individuals to those whom such groups and individuals consider most capable of using it to meet current social needs. [6]
Steiner views labor as a form of "wagery," the remnant of serfdom and slavery (where once we sold our whole body, now we sell our ’labor power’). But it is also an economic untruth, an impossibility which we allow to persist: "[People] actually speak as though a kind of sale and purchase took place between the wage-earner who sells his labour and the man who buys it from him. But this sale and purchase is fictitious. It does not in reality take place... [In reality] it is values which are exchanged. The worker produces something directly; he delivers a product, and it is this product which the enterpriser [Unternehmer] really buys from him. In actual fact, down to the last farthing, the enterpriser pays for the products which the workers deliver to him. It is time we began to see these things in their right light." [2]
Capital creates value by the application of intelligence to labor. It is the human spirit manifest in the economic process. An interesting analysis of this viewpoint is provided by Folkert Wilken in his book The Liberation of Capital. [7] Often taking the form of money, it further frees and empowers the entrepreneur to apply their intelligence. The artist Joseph Beuys famously expressed this as "Art=Capital" (Kunst=Kapital), or alternatively, for his art piece in the 'Luna Luna' art fair in 1987, "Money is not CAPITAL at all. CAPACITY is CAPITAL." [8] Capital is therefore intimately linked to the individual, although it also owes much to our common heritage, especially the way we are educated.
In an associative economy, therefore, land, labor, and capital are understood as rights phenomena. Some interpret this to mean they are held in trust on behalf of the community (but not held by the state) and consequently managed by those with both the desire and capacity, but how precisely this idea is given practical expression is one of the key, and liveliest, areas of research in associative economics.
Land trusts, which remove land from the private market, but also keep it out of the hands of the state, have been developed for the protection of the environment and in order to make home ownership more accessible to low income people.
As for labor, many different kinds of efforts have been made to treat laborers not as a mere company expense or a mere factor of production, but as partners and associates in the business. That entails profit sharing, and a number of profound changes in the way workers are involved in companies.
As for capital, the associative idea broadly speaking is that the buildup of capital is a social phenomenon due to many more stakeholders than are acknowledged under traditional capitalism. As a social phenomenon, accumulations of capital by a company should be administered in a way that reflects social consideration among many stakeholders: Not just investors, but workers, the local and to some extent global community and environment, and independent educational institutions, are the sources of profits and profitable ideas and capital, and should have some share in the company and in its profits. An associative company would be set up so that it cannot be sold off by investors, since the company is not merely the creation of investors. But many different arrangements are possible.
One example is the Mondragon Corporation (started by Catholic priest José Mª Arizmendiarrieta, who was not associated with Rudolf Steiner, but whose economic views overlapped in important ways with Steiner's economic views). By the end of 2011, the Mondragon Corporation [9] employed 83,869 people working in 256 companies [10] in four areas of activity: finance, industry, retail and knowledge.
In an associative enterprise, distant investors, if allowed to invest at all, might not be given any voting rights, or the ability to take control of the company and sell it unilaterally without regard to other stakeholders. An emphasis might be placed on getting investment capital from a company's workers, who could be asked to invest part of their earnings or profits in a company investment fund to help expand the company and develop new offshoots. When a worker leaves the company, he withdraws his invested capital, plus its earnings and interest, and some sort of pension given enough years of service. The company is set up so that no one can amass company shares, and thus the company itself cannot be sold and remains a resource for the community, which after all has been a part of the company's success. The company, while for-profit, might be held in trust by a non-profit board, which ensures the company remains as a resource for the community. The broad guiding lines of associative economic enterprise are that economic life should not be owned or managed by the state (which however of course legislates and makes sure that laws and regulations are followed by companies, including basic rights for workers), nor should economic life be owned or managed merely by those who have lots of capital to invest; ownership should be spread among all the stakeholders, with an emphasis on those who work in a company, the local community, and independent schools. Management of the company should be determined not by the state, but by talent, know-how, and success: i.e., whoever can manage the company profitably and for the benefit of all stakeholders, might be selected in various ways by various stakeholders, depending on circumstances.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. The defining characteristics of capitalism include private property, capital accumulation, competitive markets, price systems, recognition of property rights, self-interest, economic freedom, meritocracy, work ethic, consumer sovereignty, economic efficiency, profit motive, a financial infrastructure of money and investment that makes possible credit and debt, entrepreneurship, commodification, voluntary exchange, wage labor, production of commodities and services, and a strong emphasis on innovation and economic growth. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, such as socialism or communism.
In political philosophy, the means of production refers to the generally necessary assets and resources that enable a society to engage in production. While the exact resources encompassed in the term may vary, it is widely agreed to include the classical factors of production as well as the general infrastructure and capital goods necessary to reproduce stable levels of productivity. It can also be used as an abbreviation of the "means of production and distribution" which additionally includes the logistical distribution and delivery of products, generally through distributors; or as an abbreviation of the "means of production, distribution, and exchange" which further includes the exchange of distributed products, generally to consumers.
A cooperative is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise". Cooperatives are democratically controlled by their members, with each member having one vote in electing the board of directors. They differ from collectives in that they are generally built from the bottom-up, rather than the top-down. Cooperatives may include:
This aims to be a complete article list of economics topics:
An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form of profit, rent, interest, royalties or capital gains. The aim of capital accumulation is to create new fixed and working capitals, broaden and modernize the existing ones, grow the material basis of social-cultural activities, as well as constituting the necessary resource for reserve and insurance. The process of capital accumulation forms the basis of capitalism, and is one of the defining characteristics of a capitalist economic system.
A worker cooperative is a cooperative owned and self-managed by its workers. This control may mean a firm where every worker-owner participates in decision-making in a democratic fashion, or it may refer to one in which management is elected by every worker-owner who each have one vote. Worker cooperatives may also be referred to as labor-managed firms.
In Marxian economics, economic reproduction refers to recurrent processes. Michel Aglietta views economic reproduction as the process whereby the initial conditions necessary for economic activity to occur are constantly re-created. Marx viewed reproduction as the process by which society re-created itself, both materially and socially.
Social threefolding is a social theory which originated in the early 20th century from the work of Rudolf Steiner. Of central importance is a distinction made between three spheres of society – the political, economic, and cultural. The idea is that when economy, culture, and polity are relatively independent of one another, they check, balance, and correct one another and thus lead to greater social health and progress. This is not to be confused with laissez-faire economics. Steiner was concerned rather that businesses should not be able to buy favorable laws and regulations, and that governments should regulate the economy and protections for workers impartially and not be corrupted by participating in business. "A sphere of life calls forth interests arising only within that sphere. Out of the economic sphere one can develop only economic interests. If one is called out of this sphere to produce legal judgements as well, then these will merely be economic interests in disguise.". Social threefolding aims to foster:
Cooperativeeconomics is a field of economics that incorporates cooperative studies and political economy toward the study and management of cooperatives.
The social dividend is the return on the natural resources and capital assets owned by society in a socialist economy. The concept notably appears as a key characteristic of market socialism, where it takes the form of a dividend payment to each citizen derived from the property income generated by publicly owned enterprises, representing the individual's share of the capital and natural resources owned by society.
Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.
Economic democracy is a socioeconomic philosophy that proposes to shift ownership and decision-making power from corporate shareholders and corporate managers to a larger group of public stakeholders that includes workers, consumers, suppliers, communities and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap.
Exploitation is a concept defined as, in its broadest sense, one agent taking unfair advantage of another agent. When applying this to labour, it denotes an unjust social relationship based on an asymmetry of power or unequal exchange of value between workers and their employers. When speaking about exploitation, there is a direct affiliation with consumption in social theory and traditionally this would label exploitation as unfairly taking advantage of another person because of their vulnerable position, giving the exploiter the power.
Workers' self-management, also referred to as labor management and organizational self-management, is a form of organizational management based on self-directed work processes on the part of an organization's workforce. Self-management is a defining characteristic of socialism, with proposals for self-management having appeared many times throughout the history of the socialist movement, advocated variously by democratic, libertarian and market socialists as well as anarchists and communists.
The socialist mode of production, also known as socialism or communism, is a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism within Marxist theory. The Marxist definition of socialism is that of production for use-value, therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning. According to Marx, distribution of products is based on the principle of "to each according to his needs"; Soviet models often distributed products based on the principle of "to each according to his contribution". The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management. Surplus value goes to the working class and hence society as a whole.
Social ownership is a type of property where an asset is recognized to be in the possession of society as a whole rather than individual members or groups within it. Social ownership of the means of production is the defining characteristic of a socialist economy, and can take the form of community ownership, state ownership, common ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Within the context of socialist economics it refers particularly to the appropriation of the surplus product produced by the means of production to society at large or the workers themselves. Traditionally, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned and integrated by a single entity or network of entities representing society. However, the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy.
Marxian economics, or the Marxian school of economics, is a heterodox school of political economic thought. Its foundations can be traced back to Karl Marx's critique of political economy. However, unlike critics of political economy, Marxian economists tend to accept the concept of the economy prima facie. Marxian economics comprises several different theories and includes multiple schools of thought, which are sometimes opposed to each other; in many cases Marxian analysis is used to complement, or to supplement, other economic approaches. Because one does not necessarily have to be politically Marxist to be economically Marxian, the two adjectives coexist in usage, rather than being synonymous: They share a semantic field, while also allowing both connotative and denotative differences. An example of this can be found in the works of Soviet economists like Lev Gatovsky, who sought to apply Marxist economic theory to the objectives, needs, and political conditions of the socialist construction in the Soviet Union, contributing to the development of Soviet Political Economy.
Socialist economics comprises the economic theories, practices and norms of hypothetical and existing socialist economic systems. A socialist economic system is characterized by social ownership and operation of the means of production that may take the form of autonomous cooperatives or direct public ownership wherein production is carried out directly for use rather than for profit. Socialist systems that utilize markets for allocating capital goods and factors of production among economic units are designated market socialism. When planning is utilized, the economic system is designated as a socialist planned economy. Non-market forms of socialism usually include a system of accounting based on calculation-in-kind to value resources and goods.
