Welcome back. In Episode 1 we talked about liberalism as an ideology, and what ideology
means. I strongly advise watching Episode 1 before watching this video otherwise it might not make a whole lot of sense.
In this video we're gonna be talking about liberalism's relationship to that curious
phenomenon that is capitalism.
'Capitalism,' a little bit like 'liberalism,' is one of those words that it's sometimes difficult to pin down even though we might think we have a rough idea what it means.
To a lot of people capitalism just means, well, "This - the economic system we have now." And yes
that's a start, but really the economic system we have now is an example of capitalism - we're interested in what
capitalism fundamentally is.
We can say that capitalism has things like free markets; private ownership of machinery, land, and tools; a focus on profit; and people working for wages.
But again, those are just features of it than can be present in a greater or lesser degree.
What's the core of capitalism?
I'll walk you through an example: let's say you've got some money and you invest it in buying some wood
and employing some labourers. The labourers put their time and labour into the wood and they increase its value by carving it into a chair.
Because it's now increased in value you can sell it for profit. And you keep the profit for yourself rather than give it to
the people who actually put the work in. Instead you pay them in wages, and the wages are always less than
the total profit that actually gets made otherwise you wouldn't get anything back on your investment. The
money you originally invested is called capital: hence you are a capitalist. And that - the investment/wages/capital relation - is the core of what we call capitalism.
But actually the picture is a little bit bigger than that because we missed a lot of things out. Like,
where did you get your money in the first place - did you inherit it, steal
it, did you win it as a prize? Where did your workers come from - are they black, white, male, female,
what led them to work for you specifically? Where did you get your wood
from - was it cut down sustainably by well-paid lumberjacks, or was it chopped by slaves?
And if there are forty different chair factories in town the answers to these questions might
be different for every single one of them, but they're all still capitalist factories. That's why in their book
"How the West Came to Rule," the authors define capitalism not just as that investment/profit/wages
relationship but also everything - all the social, economic, and political factors - that sustain and reinforces that practice. Which is a whole lot.
To understand why capitalism and liberalism are so linked together, we need to go back in time
to before either of them were invented. In the days before capitalism, strange as it might
seem now, a lot of land wasn't owned by anybody - it was what they called common land. The family was the main unit of society so you and
your peasant family might farm the common land in order to survive.
If you were a very wealthy family, maybe even a royal family,
maybe you wouldn't need to farm the common land because you've got a lot of money already that either
you or an ancestor stole, probably in a war, from somebody else.
Then this new thing starts happening called enclosure, where rich people start fencing
off the common land and saying that they own it. Nowadays we might call that stealing,
but then I suppose nobody owned the land so maybe we can't call it that? But regardless,
you and your peasant family
and your village go down to the common moor one morning and find that there's men with
swords there now saying that you can't use it anymore, so you've lost the only means you
have for feeding yourself. Great.
So now, you can't work for yourself as much anymore.
You have to work for somebody else in order to survive, working on their land,
fighting in their armies, or when the Industrial Revolution eventually happens - paid for by
all that slavery and colonialism we're about to be doing - you'll be able to get a job in
a factory. As a result, society becomes more atomised and the individual labourer who must go
to where the work is and work for somebody else becomes the unit of society.
And hey, that's the transition from feudalism to capitalism - now we have the free market, we have the investment/profit/wages relationship
and individual labourers who have to work for someone else in order to survive, and all that other good stuff we talked about.
(All of this by the way is a very quick, simplified, and Eurocentric story: if you'd like to
know more about the invention of capitalism there are recommended readings in the description but you get the rough picture.)
This transition between feudalism and capitalism was hugely sped up by the English Civil War.
Parliament, which was made up of rich white dudes that very few people actually voted
for, got upset because Charles I was running the country on his own and starting to look
like a bit of a tyrant, at least from where they were sitting. Eventually the tension
broke out into an incredibly bloody and fascinating war with Parliament's forces, led by Oliver
Cromwell, fighting the King.
The War ends in 1649 with Charles I having his head cut off and Parliament winning. And oh my God, the king
is dead! All kinds of new ideas about how to organise a society start getting thrown out there into the public space,
because a lot of people suddenly get the idea that the king's dead, anything goes! We can built
whatever kind of society we want! Some people even start saying hey, why don't we have
religious freedom so that we don't have so much war all the time, and bring back the
common land so that nobody has to be poor, and actually why don't we give everyone a say in the government this time around! One
group called the Diggers even invent a form of anarchist socialism, hundreds of years
before Marx is even born!
Was the Earth made to preserve a few covetous and proud men to live at ease? To bag and barn up the treasures of the Earth from others,
that these should beg and starve in a fruitful land? Divide England in three parts: scarce one part is manured. So that here is land enough to maintain all her children!
Yet many starve for want or live under a heavy burden all their lives. And this misery the poor have brought upon themselves, through lifting up particular interests by their labours.
The Earth, sirs, was made to be a common treasury for all.
And a lot of these new hopeful radicals fight in Cromwell's army thinking that once the King is gone they'll get the chance to build a better society.
But when Charles is out of the way, Cromwell says, "Hey, how bout instead of all that freedom stuff,
fuck you!" He turns around and executes most of the people who really wanted serious change and
establishes his own government of "Rich White Dudes Who Want to Be Filthy
Rich White Dudes. Also Let's Do Slavery a Lot More and Commit Atrocities in Ireland."
Suddenly the rich white landowners in Parliament are in charge of everything, and there's nobody standing in their way
stopping them from stepping up slavery, stepping up colonialism, stepping up capitalism, and generally trying
to make as much money as possible. Even when Charles' son, Charles, eventually becomes
King again, Parliament keeps all their new powers. And capitalism is well and truly let off the leash.
So there's this contradiction in 17th Century Britain between lots of people suddenly getting
great ideas about freedom, and the desires of rich white landowners to absolutely prevent stop that
freedom from happening because it'll mean they won't be rich anymore. And in 1690, the philosopher
John Locke writes a book that embodies this contradiction. And he says "Hey, d'yknow what would
be a great idea? If governments could only be established with the consent of the people!
Terms & Conditions Apply: offer not available to slaves, women, Indigenous Americans, or
anybody who doesn't own property. Side effects include slavery, genocide, colonialism, and imperialism.
And hey, look at that, individualism plus an emphasis on freedom but with blatant exceptions
when it's profitable. Liberalism is born! And a bunch of slave owners decide to take
John Locke's ideas and pretty much build a whole new country out of them called the United States of America!
Because of the period of history at which it emerged liberalism basically takes capitalism
as a given. Remember in Episode 1 I said that ideologies exist in order to justify to justify violence? Well a lot of the violence that liberalism legitimises is the violence
that keeps capitalism going. So, in the USA Founding Fathers made exceptions
to their rules of liberty for slaves, because slavery kept their economy turning. John Stuart Mill made exceptions to
the rules of liberty for colonialism when colonialism was keeping the British Empire's economy turning. Nowadays my government makes exceptions
to the rules for the human rights of immigrants, whose labour keeps our economy turning.
From the very beginning, liberalism was designed to reconcile this vision of a better, freer world with the fact that
the English Revolution essentially failed to bring that world about, and instead just gave power to
rich people so they could use capitalism and get even richer, with all the violence that
entails. Incidentally, Cromwell's statue is still outside Parliament.
We're moving now towards the modern age, and in Part 3 we'll be looking at liberalism
and capitalism's latest incarnation: neoliberalism. In this episode we've learned about
the histories of capitalism and liberalism, and how they go together.
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