Welcome to this series of essays on three ‘voices of capital’: The Economist, The Financial Times, and The Wall Street Journal. What do I mean my ‘voices of capital’? To answer that question, let’s get more specific. By capital, I mean the interests, or the needs, of two social entities:
- The market system (capitalism); and
- The ruling class of the market system (capitalists).
Why should we care about the market system and the classes, or social relations, it produces? What even is a market? A market is a mechanism for exchanging produced goods, or desirable objects produced by labourers working with technology. A capitalist market obtains when multiple sellers are competing to sell these objects to multiple buyers at a profit. The capitalist market system further includes the effect market relations have on social and political relations, and vice versa. That is to say, the market system is a relationship between the market, the state, and society (from individual families to arts and culture). ‘Capital’ refers to the needs of this system, including the needs of his economic, political, and social parts. It can’t simply refer to the economic logic of capitalism, since politics drives change, too.
This is why the founders of modern economics, from liberals like Adam Smith and David Ricardo to socialists like Karl Marx and Michał Kalecki, are not merely economists but political economists. They study political economy–the ways in which politics and economics jointly drive changes to society. Technically speaking, we should refer to the study of capitalism, and indeed of all social systems, as the study of social political economy. In the modern age, that means studying how the market and the state jointly shape society. The social system is driven by the market system and the state system.
But capital isn’t the state system or the social system–not really. Capital primarily, though admittedly not entirely, refers to the needs of the economic market system; what the capitalist market needs to reproduce itself in a given sociopolitical context. Capital is embedded in the intertwined fabrics of market, state, and society, but it is primarily identifiable with the needs of the market system. The modern social system comprises economic, political, and social subsystems. The market system is one such subsystem, and the one I intend to focus on in this series, together with the state system and with brief references to the social system produced by states and markets interacting.
So, what does the market system need? It needs what all systems need–to survive. This means adapting to changes to the state system in particular which might affect the market system’s ability to adapt to changes in its external environment. But the market system also has a deeper system to adapt to. It’s what lies beneath our feet, and what flows through us. Some scholars have aptly called it the Earth system.
The Earth system comprises geography, ecology, biology, and all the other dimensions which form the larger whole of which the human system is one part. Economics is primarily about translating natural inputs into outputs which satisfy human wants and needs. It does this through technology–technology which develops thanks to competition. One form of competition is economic. We call it ‘trade’. Another is political. We call it ‘war’. Despite what the headlines say, we don’t exactly live in a warring age. We live in a trading one–an age dominated by commerce, rather than conquest, at least among the great powers, or the most powerful states in the system. Perhaps war will return to Europe and America someday. We must hope not. These big questions form part of the scope of this essay series.
But to get more specific. The market system has to adapt to the changing needs of the Earth system, the state system, and (perhaps more broadly) the social system. The cosmic system, the system of stars and planets and asteroids, is probably too broad a system for the market to compute. But some capitalists do want to reach to the stars …
So, to cut to the chase: having defined capital as the needs of the market system, what do I mean by the needs of the ruling elements of that system–the needs and desires, in other words, of the capitalist class?
This class is defined by its relation to another class: the working class. The relation between workers, or ‘wage labourers’ (as opposed to peasants, chattel slaves, or other labourers who do not receive a money wage for their labour), and capitalists is a market relation. Workers sell their labour to the capitalists. That’s what a wage is. It’s the price the capitalist is willing to pay for the desirable object that is the worker’s labour activity–their realisation of their human capacities to (in large part through technology) transform nature to meet certain needs. Adam Smith and Karl Marx are the founders of this theory. Smith, often labelled a classical liberal, was surprisingly clear on the antagonism between these two trading classes–an antagonism which looked an awful lot like war; a class war. Smith notes in Book I of The Wealth of Nations that it is popular to see labour unions as stronger than any union of capitalists–but if this were true, wages would be much higher than they are in reality. So, Smith deduces that ‘combinations’ of capitalists are equally significant as combinations of workers. Just look today at the Paris Club and London Club of investors.
But combinations are increasingly impersonal, more like combinations of numbers than combinations of people in the age of financialised capitalism. Some people, nonetheless, benefit from this system much more than others do. The existence of a capitalist class is proved by the extortionate gap between rich and poor. This distributional fact springs from a fact of economic production and its organisation: the fact that workers still sell their labour activity at a price set, to a significant extent, by capitalists, whose power derives ultimately from their majority ownership of the means of production, or economic resources and technology. Capitalists’ actual market power generally trumps that of workers (although some have argued that workers’ latent but not-yet-realised power is much greater). Just look at the lack of wage growth in recent decades. Is this a system where workers set the rules?
By capital, then, I mean both the interests of the capitalist system and the interests of its ruling element: the capitalist class. Why distinguish between the two? It is possible that the interests of the two can diverge. Even when they do not, it is possible that the capitalist class, comprising individual capitalists, might make mistakes, either individually or collectively, about what is in its interests. Higher profits might seem to benefit capitalists, but they do not always benefit capitalism. After the Second World War, the threat of Soviet communism, the war-driven destruction of much private property, and the greater clout of labour meant that capital had to concede substantial economic demands to the generally weaker class of the system–but in this case, through a warfare state which, through post-war welfare, balanced capitalist interests with worker interests. Alas, this was made possible by a devastating war whose potential benefits to labour are trumped by the horrors of the war itself. The silver lining is much smaller than the dark cloud. And the class balance did not even last long, fragmenting in the crisis of the 1970s and collapsing in the 1980s, as the capitalist class returned to economic and political dominance and wages stagnated again, after a paltry three decades of modest gains.
That’s capital. The needs of the market system (capitalism) and the class interests which it is structured to serve (the interests, that is to say, of the capitalists). So, why establish this essay series on the Economist, the Financial Times, and the Wall Street Journal? Because each journal is what I call a ‘voice of capital’, publishing editorials and, to some degree, long reads and opinion pieces which generally reflect the interests of the capitalist class and the market system which produces, rules, and is ruled by this class. What is especially interesting about these three newspapers is that they are not only, as with most mainstream newspapers, privately owned, but are unafraid, especially in editorials, to express the interests which make their publication possible–the interests, that is to say, of the market system and its ruling elements.
They do vary in their dogmatism. The Financial Times is more sceptical than the Economist is in advocating benefits to the capitalist class; but both share a concern for the survival of the capitalist system. Both voice the needs of capital, but they place different degrees of emphasis on the ways in which these needs are articulated and defined. The Financial Times puts capitalism as a whole first, while the Economist gives the class of capitalists considerable priority. The Financial Times puts the first definition of capital first; the Economist, tacitly, the second. Since I am based in the UK, I am accustomed to reading the London-based Economist and the Financial Times, but I look forward to reading more of the Wall Street Journal (whose name rather gives its city of publication away) on a daily basis as I write this essay series.
These publications, furthermore, stand somewhere between academic and tabloid writing: read not by the masses but by educated niches, they may seem somewhat elitist. But what distinguishes them from publications in the mainstream is their focus relentlessly on the most significant elements and flows of our system. They do not hide behind the mask of morality as often as other newspapers do–and when they do, it is transparent what systemic or class interests are being articulated underneath. As a rule, newspapers tend to be written by those with time, but not those with too much time. They are written today by the professional-managerial class, between labour and capital (a class named by Barbara and John Ehrenreich in the 1970s). Due among other things to the ownership structure of these newspapers, the professionals who write these papers must articulate the interests of the capitalist class above, and not the working class below. Due to the market competition among newspapers, the market system is also a concern.
But why should these newspapers articulate the requirements of the market system as a whole (in the case of the Financial Times), as well as the ruling class of said system (in the case of the Economist), and not just splurge on advertising and material that will sell copies to the masses? Because professionals, and some capitalists, read these three newspapers, too. They want to know what I want to know: how the system works. The capitalists speak through the mouthpieces of the professionals, but some mouthpieces are more honest than others. Politicians may be seen as mouthpieces, but what they say is geared almost entirely to maintaining power by, among other things, winning votes. These three newspapers need to sell copies to survive–but on what basis? Style, culture, and rhetorical power? Or the desire for knowledge and the quest to understand a system which is, if not rotten, then by almost all accounts (though perhaps not the Economist’s) rotting? To listen to the voices of capital today is not simply to know what rules us, but to know how it rules, through politics and economics. The story these newspapers tell is not one of a person or a corporation or even a single state, but of a system. A market system. Welcome to the story of capitalism.
Edmund Wilson 