Chapter 2
Capitalism 3.0 :
A Short History of
Capitalism
The Decline of the
Commons & the Ascent of
Private Corporations
Decline of the Commons:
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Approx. 10,000 years ago: Rise of human
agriculture and permanent settlements led to
private property. Titles were created and often
passed to heirs – typically oldest son.
In Europe, codified many of these practices yet
bodies of water, shorelines, wildlife & air were
explicitly classified as res communes, resources
available to all. Kings and Feudal Lords often laid
claim to the res communes, only to have such
claims periodically rebuked.
1215 Magna Carta – Which established forests &
fisheries as res communes was signed (under
force) by the King of England
Two Reasons in the Modern Era: Enclosure,
Externalities
Quest for Balance
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*
17th Century John Locke looks to balance the
commons and private property…one can acquire
property but there's a limit to how much he or
she can rightfully appropriate (Continental Cap)
This limit is set by two conditions:
1. No more than he/she can join his/her labor to
2. It has to leave “enough and as good” in
common for others *
Reflects English common law of the time (e.g. riparian landowner could
withdraw water for own use, but couldn’t diminish the supply available to
others)…such beauty twas not to be…
Enclosure:
The transformation that launched
the Modern Era (of Disinheritance)
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18th – 19th Century: Local gentry, backed by Parliament
fences off village lands, converts them to private holdings
Impoverished peasants drift to cities, become industrial
workers
Landlords invest agricultural profits in manufacturing
Thomas Paine* “two kinds of property” :
(1) natural (earth, water, air) in which all have a birthright
(2) artificial or acquired (invention of men) in which
equality is impossible, diminishing one’s birthright seeking
“indemnification for that loss” with a “national fund.”
* Like John Locke, he believed nature was a gift of God to all
America & our relationship to
The Commons:
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Land Ordinance of 1785
Homestead Act
Morrill Land Grant College Act
Reclamation Act
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1877 Desert Land Act
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Hundreds of square miles
removed under the Homestead Act land said to be worthless, sold
for 25 cents an acre to anyone promising to irrigate it (Haggin &
Tevis, Kern River “Robbery”)
◊1995 Expectorating the Spectrum
Congress
gives digital broadcast frequencies away free to the same media
companies to whom it gave the analog spectrum free of charge
Ascent of the Corporations:
Rise of the publicly traded stock company
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1776 Barely a handful of corporations in Britain or America
Early America, state legislatures retained some control
By mid-19th cent. Corporations could live forever, engage in
legal activity, merge with or acquire other corporations
(Frankensteinomics)
End of 20th cent. Corporate power (economic and political)
was global
Two problems with Frankensteinomics:
(1) It is not a real person
(2) Its growth pays no adherence, allegiance, or care to
principles of biological growth *
* Compound Interest knows nothing about the needs of
topsoil, reforestation and general ecological principles of
proper restoration and regeneration
“If accounting could be made, private appropriations of the
commons in America alone would be worth trillions of dollars” pg. 19
20000
18000
16000
14000
12000
Bayh-Dole Act
10000
8000
6000
4000
2000
0
1970
1980
1990
Proprietorships & Partnerships
(y axis Sales are in the Billions)
2000
2001 ??
Corporations
From Shortage to Surplus
Capitalism
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Capitalism 1.0, Shortage Capitalism: Before 1950
“demand exceeded supply”
Capitalism 2.0, Surplus Capitalism: Around 1950
we entered the phase where there was no limit to
what the corporation can produce. Problem is
finding buyers. (Finding buyers means funding
buyers as the New Deal spending loses ground to
Military-Industrial-Complex spending)
- Rise of credit
- needs replaced with thneeds
Scarcity: A class by itself
Asphalt over Topsoil
 Middle class: Time,
Companionship and
Community
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Poor: Lack of goods (lack
of ability to pay, not actual
scarcity of product)
Land, resources dumping
sites abundant yet
aggregate capital scarce
Rules and Practices fixed
accordingly to assist
capital scarcity. Protecting
this element of artificial
scarcity (aggregate
capital) is placed above all
else.
3 Pathologies of Capitalism:
 Destruction
of nature
 Widening the gap
 Failure to promote happiness
1. Based on comparative rather then absolute conditions
(David Hume calls it the Narcissism of small differences, psychologists and
economists refer to it as Hedonic Adaptation)
2. Surplus capital foments anxiety (Live without a “Net” pay)
3. Surplus capital speeds up life and creates great stress
(what does that say for the speed of life when capital is digital?)