What is Capitalism?, Part 2: Nobody Wants to Take your Toothbrush

Last week we looked at wage labour and the class divide, where we assessed the capitalist class to be the minority that owns the means of production, such as land, a factory, or an office, and the working class to be the majority that are made to sell their labour power in exchange for a wage and use the means of production to produce wealth for the capitalist.

This state of affairs isn’t ‘natural’: it is a system that requires the enforcement of ‘private property rights’ to exist. These rights pertain to one’s ownership of property, whether that be land, a factory, or office, and they allow the owner to control it as they wish, forbidding access to unauthorised individuals.

While neoliberal economists like Milton Friedman speak favourably of private property rights as the fullest realisation of individualistic freedom, saying that “the only way in which you can be free to bring your knowledge to bear in your particular way is by controlling your property”, other economists like Karl Marx drew an arguably more useful distinction between the idea of ‘private’ property and ‘personal’ property. Private property is defined as property that is unused by the owner and used to generate wealth out of other people’s labour, with personal property referring to property that is used personally by the owner. This distinction lays bare the difference between owning multiple houses for rent, versus owning your own house that you live in. The difference between owning acres of farmland where employees produce profit for you, versus owning your own toothbrush. Under this definition, the vast majority of us own no private property; we only have our personal property, and our ability to perform labour.

There is a third form of property, which applies to property considered too large or impractical for a single person or family to realistically use. This form is called collective property and refers to property owned and controlled by a group as a whole, whether that be by the community (via common ownership) or by a specific subset of the society (for example, the workers at an office). This is an alternative to private ownership and what some would consider to be a more just and democratic model of ownership. So what is there to stop us from owning our workplaces collectively? You guessed it, private property rights.

For one person to own large swathes of land and buildings that they personally do not use, and thus retain exclusive access and control of them, their private property rights need to be enforced. These rights are legislated for by the state, providing the enforcement necessary for these rights. The ownership of the capitalist is asserted through statist institutions, like the police, the courts, and through prisons. In practice, the enforcement of these rights is done through violence.

If a group of workers were to assert ownership and control over their workplace on the basis that it is used primarily by them, then this movement would quickly be squashed by the police. If the workers were to occupy and resist against the police, they would be met with violence at the hand of the state. Therein lies the cost of private property rights: the requirement of statist violence to enforce them.

This state violence can be easily seen when we look at squatting: the practice of occupying empty homes owned by landlords so that rough sleepers can have somewhere to stay. In London, there are more than enough empty homes to house all those sleeping on the streets, yet they stay empty due to the practice of landlordism: owning a house that you don’t intend to live in, for the purposes of renting it out or for housing speculation. When squatters occupy these empty homes to provide rough sleepers with shelter, the state enforces the landlord’s private property rights by sending in the police to violently evict them from the premises. Even when the house is being utilised fully by legal tenants, the landlord is making money by doing little to no work, due to the tenants providing a large part of their wages to the landlord in the form of rent. In this sense the tenants work not just to sustain themselves, and their capitalist boss, but also to sustain their landlord.

It quickly moves from an economic question to a philosophical one to argue whether the idea of private property rights is a just one or not. If the capitalist owns the private property in accordance with the law, why wouldn’t it be just for those rights to be enforced?

If you were to ask a capitalist where they got their private property from, they’d say that they either inherited it or bought it from someone else. In this sense, their right to own the private property comes from what used to be somebody else’s right, which then transferred to them legally through inheritance or trade. Thus, the legitimisation of private property rights rest on the legitimisation of those who used to own the property before them. If you were to examine how the previous owners came to own the property, they’d also say that it was passed on to them through inheritance or trade. Trace this line long enough, and you will end up at a point where the rights to the property were won through violence, such as through war and conquest.

And even prior to this phase of property being owned by those with the mightiest armies, the very conception of private property had to first come into existence: go back far enough and there were no states, no police, and no armies to enforce private property rights, and thus there was no private property. All land was held in common, used by all through a natural principle of free access. In the UK, it was only until the process of enclosure, where the common land was siphoned off and entitled to aristocrats and landlords through legal acts passed by the Crown, that this land ceased to be available to the commons.

In this way private property rights are dependent on the state both historically in terms of enclosure, and in modern times through legislation and the continuation of the threat of state violence in order to enforce them. One widely used definition of the state is: a centralised organisation that wields a monopoly on the use of violence within certain borders. If you own private property, the state is there to use its institutions such as the police and military to enforce those property rights.

This is how modern private property rights can be traced all the way back to medieval times, with legitimacy of these rights resting on the perceived legitimacy of enclosure and conquest. If we believe that the monarchy is an unjust system, and that it is not legitimate to take something by violent force (a.k.a. theft), then that results in the collapse of the moral argument for private property.

If private property were no longer a thing, then the capitalist class could no longer restrict access and control of the means of production, and thus could no longer operate the wage labour system to generate profits off the workers’ labour. All property would be owned either personally, for one’s own personal use, or collectively, with their fellow workers, tenants, or the community. Capitalism rests on the class system, which in turn rests upon the enforcement of private property rights, which in turn rests on the state. Therefore, the existence of a state is a requirement for capitalism. Without private property rights, the class system would collapse and so would capitalism, ushering in an economic system where the means of production are held socially under collective ownership: this alternative system is referred to as socialism.

That is the fundamental difference underlying the two opposing economic systems: who owns and controls the means of production? Is it an elite minority, or is it everyone? Markets also play an important role in capitalism, and the perceived effectiveness of distribution of a market-based economy is why many would consider capitalism to be the most successful economic system that we could ever have, despite the authoritarian underpinnings of such a system.

Markets will be covered in a future instalment of this series, but next week we will have a look at the state. We have already introduced the idea of a state and briefly discussed its role in enforcing private property rights; however, there is a lot more to discuss regarding how it is used to prop up capitalism both domestically and globally. Make sure to grab a copy of Felix next Friday for Part 3!