Capitalism Is the Enemy of Commerce
People and businesses can transact in ways that make everyone more prosperous, but capitalism concentrates wealth
Technology is not driving itself. It doesn’t want anything. Rather, there is a market expressing itself through technology — an operating system beneath our various computer interfaces and platforms that is often unrecognized by the developers themselves. This operating system is called capitalism, and it drives the antihuman agenda in our society at least as much as any technology.
Commerce is not the problem. People and businesses can transact in ways that make everyone more prosperous. If anything, capitalism as it’s currently executed is the enemy of commerce, extracting value from marketplaces and delivering it to remote shareholders. The very purpose of the capitalist operating system is to prevent widespread prosperity.
What we now think of as capitalism was born in the late Middle Ages, in the midst of a period of organic economic growth. Soldiers had just returned from the Crusades, having opened up new trade routes and bringing back innovations from foreign lands. One of them, from the Moorish bazaar, was the concept of “market money.”
Until this point, European markets operated mostly through barter, the direct exchange of goods. Gold coins, like the florin, were just too scarce and valuable to be spent on bread. Anyone who had gold — and most peasants did not — hoarded it. Market money let regular people sell their goods to one another. It was often issued in the morning, like chips at the beginning of a poker game, and then cashed in at the close of trading. Each unit of currency might represent a loaf of bread or a head of lettuce and would be used as credit by the seller of those items as a way of priming the pump for the day’s trade. So the baker could go out early and buy the things he needed, using coupons good for a loaf of bread. Those coupons would slowly make their way back to the baker, who would exchange them for loaves of bread.
The Moors also invented grain receipts. A farmer could bring 100 pounds of grain to the grain store and leave with a receipt. It would be perforated into 10-pound increments, so that the farmer could tear off a portion and spend it to buy what he needed. The interesting thing about this form of money is that it lost value over time. The grain store had to be paid, and some grain was lost to spoilage. So the money itself was biased toward spending. Who would hold onto money that was going to be worth less next month?
This was an economy geared for the velocity of money, not the hoarding of capital. It distributed wealth so well that many former peasants rose to become the new merchant middle class. They worked for themselves, fewer days per week, with greater profits, and in better health than Europeans had ever enjoyed (or would enjoy again for many centuries).
The aristocracy disliked this egalitarian development. As the peasants became self-sufficient, feudal lords lost their ability to extract value from them. These wealthy families hadn’t created value in centuries, and so they needed to change the rules of business to stem the rising tide of wealth as well as their own decline. They came up with two main innovations. The first, the chartered monopoly, made it illegal for anyone to do business in a sector without an official charter from the king. This meant that if you weren’t the king’s selected shoemaker or vintner, you had to close your business and become an employee of someone who was. The American Revolution was chiefly a response to such monopoly control by the British East India Company. Colonists were free to grow cotton but forbidden from turning it into fabric or selling it to anyone but the company—at exploitative prices. The company transported the cotton back to England, where it was made into fabric, then shipped it back to America and sold it to the colonists. The monopoly charter was the progenitor of the modern corporation.
The other main innovation was central currency. Market money was declared illegal; its use was punishable by death. People who wanted to transact had to borrow money, at interest, from the central treasury. This was a way for the aristocracy, who had money, to make money simply by lending it. Money, which had been a utility to promote the exchange of goods, became instead a way of extracting value from commerce. The local markets collapsed.
The only ones who continued to borrow were the large, chartered monopolies. Of course, if companies had to pay back more money than they borrowed, they had to get the additional funds somewhere. This meant that the economy had to grow. So the chartered corporations set out to conquer new lands, exploit their resources, and enslave their people.
That growth mandate remains with us today. Corporations must grow in order to pay back their investors. The companies themselves are just the conduits through which the operating system of central currency can execute its extraction routines. With each new round of growth, more money and value is delivered up from the real world of people and resources to those who have the monopoly on capital. That’s why it’s called capitalism.
This was section 45 of the new book Team Human by Douglas Rushkoff, which is being serialized weekly on Medium. Read the previous section here and the following section here.
