Commerce ≠ Capitalism

Benjamin Loomis

Apr 11

Commerce and capitalism are not the same thing. I think it’s good to separate these concepts that have become so intertwined because making these two terms synonymous leads to all sorts of misunderstandings.

Commerce is closer in definition to the word “trade” than capitalism. Commerce is simply the exchange of goods. It is the interactions people and organizations undertake to receive goods or services they do not produce. The medium of exchange is unspecified. Commerce can be achieved through direct barter, loans, gifts, monetary transactions, or other arrangements between two or more parties. For millennia, humans have established agreements, contracts, trade routes, markets, businesses, and other systems of exchange to conduct commerce individually and collectively.

This is important because most of the things I hear fans of capitalism claim to like about it are not actually part of capitalism. The idea of being an entrepreneur and selling your wares or skills to your neighbor is not capitalism. The idea of trading globally is not capitalism. The free market and freedom itself are not capitalism. All of these things have existed and can exist in systems that are not capitalism.

Historically, capitalism looks like the evolved form of the world’s most dominant financial systems. But as with all evolving things, the form we see is only the latest. It continues changing. Regardless of how you feel about capitalism, change is a constant, and no economic system has survived it. Each has in bits and starts been overtaken by something new, as advances in technology and human thought outpace the rules of commerce established.

Undoubtably in 2021 we are seeing unprecedented stress to our global financial systems and all others. And simultaneously the technological capability of individual humans to create and communicate is at an unparalleled high; we each hold more processing power than it took to launch rockets fifty years ago on our bedside table. The current economic system was not created with the present world in mind. These are the conditions in which economic systems change, and fan of capitalism or not it will pay to think about new possible configurations. And if you care about your own life and anyone else’s, you can work for new systems that do better than any economic system previously has at making life decent for the average person.

So we are talking about businesses that are not capitalist. What does that look like? The key difference is where the profit margin flows. Capitalist businesses are hierarchical and pyramid-shaped. The profit generated by each employee is vacuumed upward and ultimate distribution of that wealth is controlled by a small group of shareholders or owners, who also control who can make decisions for the business and when. It mimics a monarchy, with all power over the business treated as hereditary and granted only to others by will of the business’s ruler or rulers. This concentration of power is wealth is cyclical, as the same people and their families retain the ability to invest further in the business’s development by expanding the number of people employed for wages.

The first capitalist businesses arose within monarchies, and beyond having that as a model or talking about greed it is easy to see why this structure arose. If you have enough money to invest in a business venture, you want to make sure you don’t lose it, so you keep control of your profits and business as tight as possible. This makes a little sense at the dawn of capitalism, when mail was delivered by horses and ships and money was gold. Centralized, hierarchical structures would have been the only sensical way to run a large-scale business.

But now, in our current tech paradigm, capitalism isn’t only cruel, it is inefficient. Platforms exist to allow thousands of participants to communicate and make fruitful decisions together through the internet. Currency can be raised through crowdfunding and moved securely and banklessly through blockchain. Contracts, work orders, invoices can be executed in real time. Trust and relationships can be developed without the limiter of physical space.

Is capitalism to thank for all of these solutions? One could claim, but it seems a case of the victor writing the history. First: freeware, open-source versions of any function you want to use the internet for exist-- go find them. And second, we only have one timeline to analyze so there can’t be a fair comparison. We have no idea how quickly technology would have developed if capitalism had not been the dominant economic structure as the world developed. Non-capitalist societies historically made many of the underlying mathematical, scientific, infrastructural, and governmental advances that led to the modern age. Our impression of our capitalist culture as the prime mover of technological advancement is only true because of the genocides of imperialism that made space for capitalism worldwide and the destruction of other cultures’ means of technological advancement. It could well be the case that capitalism slowed down the advent of the digital age, and the use of its tools for a more democratic economy.

So that brings us to what a non-capitalist business would look like. A business that uses everything we’ve learned from capitalism and our latest technology to divide wealth more efficiently.

Here are some quick examples, looking these up might provide a better picture than my words:

Community Investment Trust – Plaza 122 Retail Mall

https://investcit.com/Community

Earthaven Ecovillage

https://www.earthaven.org/

Evergreen Cooperatives

http://www.evgoh.com/

Mondragon

https://www.mondragon-corporation.com/en/about-us/

These are business structures that shift the arrangement of power and control to direct more of the profit generated back to those who generated it. This speeds up economic development. Surplus wealth ceases to flow to be horded in the bank accounts of a wealthy few business monarchs, it is active, jumping through the community like small balls of lightning, being spent to fulfill household needs and invest in new enterprises to fulfill those more diligently.

Students of business should note that all the challenges and joys of starting a new venture are still present. No one is saying this is easy to do, that’s why it needs smart people working on it. Starting a business in this style requires new exploration and development of structures that adapt to each region and industries’ needs simultaneously. Look to your world and think how can I make money, turn my work into a service, and create not employees but more owners around me?

Or are you in it to get that wealth? The ability to make all of the decisions? Is that why you want to run a business, to be kingly? It is a powerful urge, I feel it too. And to make good by my parents, that I can actually be a productive member of conventional society, ohgod don’t get me started.

We have so many ideas wrapped up in our heads about what consolidating our own bit of wealth will do for us. What it will prove about us to the world and the people we know. And I’m not here to tell anyone how to run their lives so if you want to run a capitalist business for your own reasons go for it.

But at least for me all of the conventional rewards of society seem hollow. Once you start looking at the history of our society it is hard to get any joy from winning in it. There are too many harms you have to accept, to perpetuate. The reason I want to start businesses is to create ways for the people I know to build wealth with an equal share. To make a living doing something they like doing, and pooling their money to own the matériel and space they need to do it. By doing so through a mix of legal contracts and working, trust relationships, I can take wealth out of the capitalist system and make it concrete in my community, developing the systems available to people here to get things done. To do commerce, not capitalism. By distributing that wealth and control wide and deep within a specific geographic community, it becomes harder to destroy or corrupt than narrow pyramids of money and power raised by capitalist business monarchs. I can know I can only do a little at a time for this place called Boone North Carolina but I have faith that others are doing more all over elsewhere.

So the main things I am doing: First, making sure any business I start does not create employees who earn a wage, but owners and artisans who have full control over the profit generated from their work. That’s the idea with the Curio Machine and the Booneiverse and Free Rad. Second: Investing where possible any savings I receive into other projects creating community ownership of retail spaces, food production, housing, or other links in the chain of human commerce.

And writing stuff like this. But main point: You can totally do all the fun parts of running businesses and organizations without all the capitalism stuff, and the more people who are invested in community-owned businesses the faster we can all scale. And as far as wealth, its truest value lies in triggering the alchemy of the human brain to get things done, to transmute power into action. As I examined as deep as I can,what is revealed is only this: at this point in history, dividing that wealth into many parts instead of keeping it all together is the best use of any wealth I can gather or move is the best way to act for a new economy. I want to live somewhere that preserves the best of the postmodern age while abandoning the outdated harms that are capitalism’s byproducts. Commerce not capitalism.

This post is a series of essays to lay out a personal political philosophy revolving around radically re-envisioning the local community as the units of our society. Go to the Table of Contents here or read more in the series:

1. The World is Broken

2. Theory of Change

3. Changing (the Shape of) the World

4. The Age of Enlightenment is Ending

5. Commerce ≠ Capitalism