Conceptualizing Capitalism

I have been put onto a really great book by Geoffrey Hodgson titled “Conceptualizing Capitalism.”The book really has all of the elements which are covered by Moldbug’s theories on property and it helps us to refine and sharpen them. It also adds extra detail to the basic nature of modern political theory and its placement of the individual as prior to society and political organisation, be it the state or any other form which we must enter into by consent.

Firstly, Hodgson takes pains to provide clear and precise definitions to terms, a process he acknowledges as opening himself up to complaints of “essentialism” from the usual suspects. We can just ignore this crap postmodern complaint.

The first concept he attacks is law. He is quite correct in my eyes to dismiss liberals/libertarians (Hayek in particular) and marxists and to treat them as practically interchangeable. Hayek’s conception of law as being mere custom formalized is nonsense, as is Marx’s placement of law in the superstructure posterior to capital. Hodgson doesn’t seem to get why they (marxists/ liberals/libertarians) are interchangeable though, even as he circles around the issue of property.

Law is defined clearly as that which is provided by a institutionalized judiciary. This law (which he notes is what the average person would recognize as such)  arose not as a formalization of custom, but exactly when, and where, exceptions to custom occurred. Custom is then that which is not institutionalized by an judiciary, but this doesn’t mean this is “spontaneous order” (whatever that actually is) and we should be careful to not fall into the libertarian/liberal trap of going into a trance like state in which we mythologize custom as a Utopian paradise of non-coercion and ground up development. It isn’t and wasn’t. All actions, all accepted standards were/are done so in accordance with authority, either explicitly or implicitly.

The upshot of this clear separation of custom and law is that law is associated directly with complex organised political systems, and becomes a key stone of the next clarification of names – property and possession.

Hodgson is quite scathing of (again) liberals/ libertarians and Marxists, who he again treats collectively. All of these groups conflate possession and property at all times. He doesn’t seem to fully get the ramifications of this, but I can provide this now – all groups conflate this because they treat the individual as prior to society and political organisation, this is because they all derive from the same development in the wake of the collapse of the English monarchy in the 16th century. The move from feudal conceptions of property and the political fallout created this state of affairs.It is precisely here that we can see the collective nature of all modern political theory. Moldbug grasped this with his delineation of primary and secondary property. We can clean up this definition somewhat with the help of Hodgson, and refer to primary property as “possession” and secondary property as “property.” Possession is the simple act of possessing something. The sovereign in effect, being sovereign, possesses all within its control.  It is not the sovereign’s property, because property is legally acknowledged ownership, for which we need a legal and political institution to recognize. It is simple possession, hence why sovereigns need armies and nuclear weapons to maintain possession.Property, as we just noted requires legal status, which is provided by a political organisation above it.

How simple is this?

Possession is the act of possessing. Property is the act of ownership as recognized by law.

Law is administered and is a function of a judiciary and legal system maintained by a political organisation. Custom is collectively acknowledged conduct in accordance with authority (implicitly or explicitly.)

But why would these concepts be conflated so much by all modern political theory from the 1600s to the present? Again, Hodgson notes the connection between such opposites as Marx and Mises on page 105 and page 106:

“Consider the Austrian school economist Ludwig Von Mises. He argued that legal concepts could be largely relegated from economics and sociology…

Hence for Von Mises, ownership was natural and ahistorical rather than legal or institutional. A physical rather than a social relationship, it was deemed independent of law or any other social institution. Von Mises downgraded the institutions required for the protection and enforcement of the capacity to have and neglected the social aspects of ownership and consumption, which may signal identity, power, or status. Contrary to Mises, the law does not simply add a normative justification for having something: it also reinforces the de facto ability to use and hold onto the asset.

The resemblance to Marx’s dismissal of law is uncanny: both Marx and Von Mises concentrated on raw physical power over objects rather than legal rights. Marx’s numerous discussions of “property” had little to say about legal rights, and he conflated property with possession. Hence Marx (1975,351) in 1844 addressed ” private property” and argued that “an object is only ours when we have it-…when we directly possess, eat, drink, wear, inhabit it, etc.,-in short, when we use it.” With both Marx and Von Mises, effective power over something is conflated with a de facto right. Legal and moral aspects of property are overshadowed.”

Of course they both would. They are both trying to define away the state in the issue of property. This is the key issue. All modern theory is fundamentally anarchist, it just varies in how delusional it is on this point.If all property is really possession, then we have to try to explain how and why people stay together – Hobbes. At which point the state is really a kind of alien entity which is called in as an umpire, or a stationary bandit that enforces these peer to peer agreements between property holders/ possession holders. When the likes of Adam Smith then talk about governance and sovereignty whilst holding the labor theory of value, he makes no sense. No one does.