The shared foundations of economic systems

Recently, I started thinking more about economic systems and decided to put my thinking about this complicated topic into words.

The economic organisation of a society is one of its most fundamental traits, and frequently, the differences concerning it are made out to be the most defining differences between societies. Here, I want to argue that all the systems that we can observe and could observe in written history were fundamentally patriarchal economic systems, making all of them more similar than often assumed. I will start by giving brief descriptions of these economic systems (mind you, I’m not an economist, so if I make mistakes, please, point them out). After describing them, I will give an overview of their similarities and will argue why they all are based on patriarchy.

An economic system essentially is how a society divides its resources, ranging from capital, natural resources, and the environment to time and labour. As soon as there are multiple people somewhere, there will be an economic system, because things have to be shared and divided somehow. That is, as long as there is scarcity. There is a great hope for the future that there will no longer be scarcity, but that’s something I will discuss at a later date.

The economic system we’re all most familiar with is capitalism. In capitalism, individuals own the capital, or the means of production. This can range from intellectual property all the way to heavy industrial equipment and everything in between. These individuals are the capitalists (although the term has gotten a different meaning as well, referring to those who are in favour of this system). In a capitalist system, the capitalist then hires labour, through the labour market. The capitalist pays wages, and in return for that, the worker delivers labour. This naturally creates a power relationship between capitalist and worker, one that is fundamentally based on the market. When there is scarcity of a certain kind of worker, their position becomes stronger. When there is a surplus, their position weakens.

One of the foremost goals of any person is to maximise their own benefits. So, naturally, a capitalist will want to pay as little as possible for as much work as possible. Workers are the opposite, they want to be paid as much as possible for as little work as possible (unless they’re a crazy workaholic like me of course). This frequently leads to clashes of interests. Furthermore, the power that employers have, especially over workers that are more available, means that abuse is frequent, along with all kinds of exploitation.

Exploitation however isn’t a necessity. First of all, because people are people, they’re not machines. They aren’t all alike. An employer can care for her employees, not seeing them as just cogs in a machine. Furthermore, there are workers in a position where they can easily switch to another employer, so they can make demands and are secure in their position. The however mostly concerns well-educated people and isn’t the case with less-skilled workers. But in general, there is a power dynamic between employers and employees.

The most frequently posed alternative is communism. In communism, the capital isn’t owned privately, but instead falls under collective control. Effectively, this means that it falls under state control. Another option is giving it to the workers, but I will discuss that separately. When capital is owned by the state, you no longer have the individual ownership with its advantages and disadvantages. The state then basically assigns people to work in a certain place. Idealists tend to want to do this without involving money, but that frequently is very difficult. Workers still need work in order to live, and the owner of the capital, in this case, the state, still needs workers to do the actual work.

Here, exploitation no longer is done by a private individual, but instead by the state and by the management it places. People are made to work, because, if they’re not, why would they do anything at all? Furthermore, the managers, as representatives of the owners, do have a power dynamic with the workers below them. Furthermore, you have an accumulation of power toward a certain group, and very little in the way of means to prevent that.

And then there is collective ownership, where the workers, together, own the capital. This generally is below the state level, and often means collective ownership of a farm, a factory, or what have you. This often is seen as a way to avoid the issues that a state-based communist system faces as far as planning and control are concerned. It indeed avoids some of them, but many issues remain. One of these is that there still has to be a mechanism for exchange between the different collectives, which requires either an overall level of control, by the state, or there will have to be a free market, as in a capitalist system, just with the workers essentially being shareholders.

that the workers are faced with a difficult situation where they essentially dilute their own wealth if they bring more people into the operation. It seems likely that they would rather not do that, or at the very least, demand significant concessions from those who join in. This can often be observed in partnerships, as for instance is common in medical practices and groups of medical specialists in many countries. New members often have to buy themselves into it, which can be very expensive indeed. A frequent alternative is that new members first have to work as a salaried worker for a given length of time, basically, paying with their labour in return for shares that presumably can’t be sold. If this isn’t done, it discourages investments and expansion, because that will often mean that there will be more people to share with, and the existing workers basically have to pay their own benefits (in whichever from they come) to do so, for the benefit of others. And if investments are made, they will generally be more aimed towards increasing productivity over employing new people.

Collectively-owned ventures also frequently need management. If only a few people found something collectively, this often isn’t the case. But let’s take a modern factory. You have hundreds or thousands of people working there. There is no way that all decisions and coordination can be made in a directly democratic fashion. So, officers have to be elected, and these will have a power dynamic with the other workers. Of course, they are answerable to the collective, but as we can see with elected officials in many positions, that doesn’t mean that they become paragons and perfect executors of the collective will. That is, if the collective isn’t exploitative already.

What has been discussed here of course is by no means an exhaustive list. There are countless variations on these systems and a multitude of others as well. But I’m writing a blog post, not a massive series of books. Furthermore, the issues with many historic systems such as feudalism are well-known (I suppose).

All of these systems have several things in common, but the one I want to focus on is the combination of power and exploitation. All of these systems include aspects of that. Of course, the extent and exact nature varies, but the fundamentals are the same. That is because the fundamentals of the society aren’t changed with different such systems. The great mistake made by many on the left is that they tend to blame all of society’s woes on the way the economy is organised. But they look beyond the far deeper issues behind why the economy is organised like it is, and why it can’t really be changed. Not without a true revolution in thinking.

This is because the foundation of our society, of virtually all societies in our present world, is oppression. This is not the oppression of workers by their bosses, but it is much more intimate. It is in almost every home. It’s the oppression of women. Men seek to suborn us, with their most fundamental argument being the difference in physical strength, which is the most fundamental kind of power. “You do this, or I hurt you, and I’m better at hurting you than you are at hurting me”. They like this, of course they do. Who wouldn’t like being the master over other human beings, to have them care for you and provide all sorts of services? They certainly like it, even if they often don’t even notice it, that’s how common and fundamental it is to our society.

This way of thinking, based on subordinating others, is in turn taken out of the house, into the economy. Furthermore, because men want to control women, they also need to control her resources. This means that it’s vital to have an economic system that is based on inequality. Even the communist approaches still contain this fundamental issue.

In the end, the most important realisation is that the economic and social systems are closely interlinked, and one cannot be changed without also changing the other. Because our world is patriarchal, all economic systems in it also are deeply patriarchal, even if they express it in slightly different ways.

In a later post, I will describe what a feminist economic system would be like, and how we could create one.