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Re: Communism, self-employment, and capitalism (correction)

Posted by Satya J. Gabriel on October 22, 2001 at 00:02:07:

In Reply to: Communism, self-employment, and capitalism posted by Julie B on October 21, 2001 at 23:26:20:

To avoid confusion, the definitions you looked up (in a dictionary?) are not those employed in this course and are not consistent with the textbook, which should be your first reference. (In the description below, you can substitute the word "surplus" for the word "profit" if you like, since profit typically refers to an accounting term and when I use profit below I'm more properly referring to the SURPLUS, as described in our textbook. I use profit, as in economic profit/surplus, only to make it easier for you to think about these definitions --- profit being a more widely used term.)

Communism refers to a distinct fundamental class process wherein the workers who create a product are the receivers of the profits generated by that production. It does not require that the ownership of the tools and machinery be collective, only that ownership of the FINAL PRODUCT be collective. One example of a communist enterprise is a kibbutz, although we could also observe a communist enterprise in the form of a collective of doctors who decide among themselves how to distribute the profits generated from their "partnership."

Capitalism (again, see your text) refers to a fundamental class process within which the product is created by wage laborers and the profits generated from that production is OWNED and distributed by a separate group of persons (or a single person who is separate from those who produced the proudct). Typically, capitalist enterprises are organized as corporations, but this need not be the case. Nor should one assume that all corporations are capitalist. A corporation could be based on communal production and appropriation (a communist corporation) or feudal production and appropriation (a feudal corporation) or, as we might imagine from our viewing of A Respectable Trade, slave production and appropriation (a slave corporation).

Self-employment is based upon a fundamental class process wherein an individual producer is both the creator of the profits and the sole first receiver and distributor of the profits generated from her enterprise. The self-employed producer need not own anything except her final output, although in many cases she may own her tools and machinery, land, etc.

The use of property ownership to define these systems is not consistent with the classical economics literature on communism, capitalism, and self-employment and, more importantly, is redundant. We do not need to reclassify private ownership as capitalism or collective ownership as communism, since both private ownership and collective ownership are useful terms in and of themselves. Capitalism is, in fact, epitomized in the current period by a form of collective and public ownership called shareholding, whereby millions of shareholders own the firm but have very little say in running it. Private ownership is also widespread and compatible with ALL forms of fundamental class processes (see your text): communism, capitalism, feudalism, slavery, and self-employment can all exist with private ownership, although different forms of private ownership. It seems that we need to discuss this in more detail and I hope you raise the question in class on Tuesday.

Finally, going to the dictionary for reference to a social scientific concept is not a good way to achieve clarity. The creators of the dictionary are using common usage as their guide for definition. The lexicographers are trying to understand how words are used in more polemical settings, not in social scientific work. In order to understand the definitions and usage of said definitions in social science and in the history of economic thought, I would happily refer you to a long list of readings. Please talk to me about this and I will make them available to you.

: I looked up communism, self-employed, and capitalism because i'm a bit confused.
: COMMUNISM: A theoretical economic system charaterized by the collective ownership of property and by the organization of labor for the common advantage of all members.
: SELF EMPLOYED: Earning one's livelihood directly from one's own trade or business rather than as an employee of another.
: CAPITALISM: An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestments gained in a free market.
: Is it possible to have a combination of two or three economic systems in a business? For example if I own a small little...bakery where I did the baking and the selling myself, benefitting from my own labor and getting the profits, that would be self -employment right? but what if my little bakery got well known and there was a high demand for the bake goods, but i couldn't keep up so i decide to hire someone to help me...now i would have a waged employee and that would be capitalism? Although what if i had a partner or a few who worked with me and got equal amounts of the work and profit...would that be communism? I'm having a little bit of trouble having a clear understanding of these systems and how they function. Is self employment simply owning a bussiness and doing the work? Is having a partner (or a few) in a bussiness considered communism? I hope these aren't too nieve of questions.



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