Writing about capitalism usually focuses, depending on ideology for this is a deeply ideological topic, on labor, markets and money. In the 20th century, pace Schumpeter, entrepreneurship also entered the pantheon.
But none of these constitutes the true unit of capitalism in the form that we have now. The capitalist unit isn’t the worker or the company or the currency or the entrepreneur.
The unit of capitalism is the unit of ownership, which is a single share in a joint stock corporation.
What we think of as capitalism is a very specific form of capitalism that has been built on the foundation of a joint stock company.
You can be strongly in favor of capitalism (I am), read the sermons of Ayn Rand every week (I don’t), and not fully appreciate this fact or its consequences (I do now, but it has taken me decades).
The joint stock corporation was invented in Renaissance Europe. Over the centuries many mutant variations have also been spawned, such as general partnership interests.
The joint stock corporation serves to concentrate wealth (and therefore certain kinds of power) in a very specific set of ways.
If you want to change how capitalism works in modern society, you have to find a way to change the unit.
Changing the unit will give you a new universe subject to new laws. If you don’t change the unit, very few things will ever change at a deep structural level.
There is a strong analogy with the world of physics.
I won’t make your eyes glaze over with an explication of the Standard Model. All we need to know for this purpose is that our physical universe is made up, at the smallest level, of tiny sub-atomic particles known as quarks.
The universe we live in has certain immutable physical properties that arise from the nature of quarks. Quarks are the unit of our physical universe.
I am simplifying here of course — the Standard Model is hideously complex (as is modern capitalism!).
But if the universe were made up of things other than quarks — or if quarks had different physical properties than they do now — we’d have a different universe subject to different laws.
The quark of the capitalist universe that we currently inhabit is a single share of stock.
What we think of as “free markets” are contingent creations of the form of capitalism that arose from the collective illusion known as a joint stock corporate entity.
There are other kinds of “free markets”, that we would all call free markets and would acknowledge as forms of capitalism, that arise from a different unit.
This is an extremely difficult idea to absorb. So much of modern life is intertwined with the idea of a share of a company being capitalism, that even thinking about “a new kind of unit of capitalism” can cause a headache.
We are all familiar with alternate forms of ownership, such as the collectivist models that create immediate polarized reactions all around. Those exist in opposition to capitalism as we know it, and are not what I am talking about.
What I am talking about is the idea of a new kind of unit that then generates a new kind of universe.
As a thought experiment to make all of this less abstract: consider a universe in which this unit, a single share of stock, cannot be inherited.
Think of that as the single change in the rules that make up the unit. And then imagine the ensuing universe, the way non-Euclidean geometries were constructed.
Someone, someday, somewhere, is going to introduce a new unit that goes “viral”, and our universe will change. If we’re lucky, it will change in ways that are for the common good.
It may turn out that this was all talked about and put to rest in the eighteenth century — but I thought I’d share this brief essay to put the concept out there.