By

Capitalism has historically been defined by its opponents rather than its proponents, and in terms of its consequences rather than its mechanisms. Specifically, it tends to get defined primarily in terms of its intended malicious effects and unintended/unaccounted damaging effects: oppression and social costs.

To navigate by such definitions is to deeply misunderstand the nature of the beast, so I want to propose a definition of capitalism (or if you prefer a less loaded term, commerce) in terms what I will argue is its essential mechanism:

Capitalism is the indirect manipulation of illegible human relationships, through the peaceful manipulation of decision contexts.

In practice, capitalism often operates with directness and violence, but the point of this definition is to get at the sine qua non that distinguishes it from other societal mechanisms. The role of “capital” is actually peripheral, since capital plays a role in defining the mechanisms of politics, kinship and war too.

The central fact about the mechanism of capitalism is that it needs neither capacity for direct action on a system, nor violent means, to influence it. This is not just a claim about an idealized model of capitalism: it is a claim about the real thing. Capitalism in our world has arguably gotten less direct and less violent over time. Today the visible motif that best captures the spirit of capitalism is not the East India Company warship, but advertising: messaging mechanisms that work to shape the background context of decisions.

Let me attempt an exegesis of my definition with a parable about the It Couple of geekdom, Alice and Bob.

Alice and Bob have a deep, cryptic bond based on priceless values nobody else understands. Outsiders can observe, but not decipher, their relationship. As best as outsiders can tell, theirs is a closed world. They live on a self-sustaining farm and do not trade with the outside world. They speak a language only the two of them know, and entirely refuse to communicate with the outside world.

Sociologists speculate, based on spy camera footage, that the Alice-Bob homestead runs on a purely Guardian system of ethics, impenetrable to, and untrusting of, outsiders, with nothing resembling a financial system. Any direct intrusion by outsiders into their private affairs provokes a war-like response from Alice and Bob.

At best, outsiders can observe when Alice and Bob are warming up or cooling off towards each other, based on the intensity of their communication.

Enter Charlie the Capitalist, or as socialist critics like to call him, Slightly Evil Chuck. Chuck runs entirely on the Commerce system of ethics. To socialists, the only thing that prevents Chuck from being Totally Evil is that he never employs violence in pursuit of commerce, and never directly intrudes where he is asked not to. His friends call him Opt-In Chuck.

Chuck is cheerful, peace-loving, quick to trust, quick to forgive, and above all, driven by curiosity, openness and an explorative spirit. Having made his fortune as a top salesman, Chuck prides himself on his ability to befriend anybody, and sell them something. To him, Alice and Bob are a personal challenge. He already knows that any direct overtures will provoke violence. He is also no cryptographer, and decides right away to not eavesdrop on their communications or attempt to decipher the Alice-Bob language.

Instead, he sets to work indirectly, by shaping the context of the Alice-Bob relationship with a growing number of choices. He does not even bother to curate the choices for salience, since he has chosen to know nothing about Alice and Bob (he is what I call a Slow Marketer). Opt-In Chuck just focuses on creating an arbitrary environment of accumulating choices at loci that do not infringe on Alice and Bob’s claimed territory.

He sets up a store to sell lemonade just outside their homestead. He gets his friends to set up other stores to sell other things like beads, books, Netflix subscriptions, telescopes and macadamia nut pies. He gets other friends (he has lots of friends) to advertise work opportunities outside the Alice-Bob farm. One friend sets up a sign that says “Experienced carpenter wanted, $15 an hour.” Another puts up a sign that says, “Wanted: PHP programmers, $70/hour.”

Within a few months, Chuck has an entire town up and running around the Alice-Bob homestead. Being a South Park fan with sense of humor, he names the town Sodosopa. He develops a condo building in Sodosopa called the Mansions of the Gods.

One day, Alice and Bob have a big fight. At least, that’s what it looks like to rubbernecking types outside. There is an intense burst of communication followed by hours of silence.

Then Bob wanders to the gate of the farm, and says his first-ever words to the outside world.

“What’s a macadamia nut?”

***

Understood through the lens of this parable, capitalism is not an ideology. It is the inevitable opening up of closed relationships due to the continuous emergence of more options in the environment outside the relationship zone.

To understand why, consider the concept of an idealized, self-sustaining relationship between two or more human beings that exists entirely within an impenetrable boundary. In such a system of relationships (an ideal tribe, analogous to an ideal gas, defined entirely by a beautiful Graberian nexus of relationships), all the dynamics must be internally contained. Assuming Alice and Bob need each other to survive, there is no such thing as a finite game (in either the game-theoretic or Carsean sense) within their relationship.

If Alice gets mad at Bob, there is really no option but to eventually make up with him and continue the relationship. There is no winning or losing for either of them. Their only option is to continue playing until death doth them part.

Alice and Bob, in this system, can only enjoy individual choice to the extent that behaviors they choose do not provoke punishment from the other.

In a very literal sense, the Alice-Bob system is an indivisible unit bound by an unbreakable infinite game, characterized by many conserved quantities (so it is conservative in both the physics and politics senses).

From the outside, it seems like a black-hole relationship zone behind a social event horizon, from which no free behaviors can escape. All of Alice’s behaviors concern Bob and only Bob. All of Bob’s behaviors concern Alice and only Alice. For a stronger version, we can assume that there are no Bob behaviors that do not concern Alice, and vice-versa. Each is entirely defined by the relationship with the other.

But the moment you allow that no real community can be this kind of black hole, the possibility that behaviors can leak becomes real.

A behavioral leak is any sustainable behavior on the part of either Alice or Bob that either can unilaterally choose, without fear of consequences from the other. This means turning some strand of their relationship into a finite game, by cashing out a temporary advantage through a permanent break, enabled by a latent choice in the background context.

This requires a defection in the sense of game theory (or exit, in the sense of Hirschman), and the archetypal mode of defection from a closed guardian system is trade with a stranger with whom one has no history.

This might happen, for example, through this sort of episode inside the Alice-Bob system (translated from the Alice-Bob language):

Alice: Take out the garbage.

Bob: I’m tired, do it yourself.

Alice: So you don’t want pecan pie for dessert tonight, I see.

Bob: Go to hell, I can always eat those macadamia nut pies those guys outside have.

Alice: Ha, right, with what money? We don’t have the dollars the evil outsiders use.

Bob: Oh yeah? I’m going to earn some. One of those guys outside wants a carpenter.

Alice: What? You promised to repair the dining table first!

Bob: Hah! Good luck with that.

The point of this exchange is that Bob could unilaterally break an illegible strand of mutual expectations concerning household chores. Chuck did not need to actively intrude (violently or otherwise) in order to engineer this break, or decrypt the Alice-Bob internal language. Merely presenting a sufficiently rich set of options for production and consumption in the environment was sufficient. Given enough time and non-zer0 variance in the Alice-Bob relationship strength, eventually one of them will defect from at least some small part of their all-consuming and illegible infinite-game relationship.

In other words, by creating an environment of meaningful choices, Chuck helped Bob put a price on the priceless, and make a decision about terminating an infinite game in an irreversible way.

This sort of behavioral leakage from nominally closed relationship systems is as inevitable as the second law of thermodynamics. If the boundary of a relationship is even slightly open, it has the potential to leak and weaken over time.

The only way it cannot is if there is a faster process deepening the relationship from the inside. As a result, the aspirational idea of deepening relationships is the central and defining element of guardian societies (there is a second, less plausible way: Alice and Bob making indefinitely increasing claims on their environment. For instance, they could have objected, violently, to Chuck growing the town of Sodosopa outside their homestead, by claiming damage to their scenic view, as would have been the case had they been home-owning NIMBYs in San Francisco, or xenophobic inhabitants of the planet Krikkit).

As something of an existentialist, I am skeptical of the indefinitely deepening-relationship idea (and perhaps more importantly, have no desire for such relationships). I suspect every relationship will eventually find its maximum depth, at which point, behavioral leaks will take over.

There’s probably some sort of metaphoric particle decay type theory in there. Maybe Romeo-and-Juliet stories are about proton decay.

Anyhoo.

The idea that capitalism is an inevitable and unavoidable asymptote, rather than an ideology that only exists while there are people championing it, is profound and highly distasteful to humanists everywhere (whom I will henceforth define as “people who believe in the possibility of relationships that can endlessly deepen faster than the environment can offer up destabilizing choices”).

Capitalism is not an ideology pursued deliberately by some to “defeat” those who live by other ideologies. It is a condition imperfectly closed societies default to in the presence of increasing choice in the environment, usually created either through the actions of outsiders or natural changes.

Actually, you don’t even need natural changes in the external unclaimed environment or a Chuck in the story. Unpredictable internal changes (curiosity driven by boredom) are sufficient. Bob would eventually have wandered off even if nothing had changed outside their homestead. Eve did not need the serpent to tempt her.

There can be no such thing as a human mind without a minimal level of restlessness, any more than there can be a vacuum without fluctuations. The Buddhist aspirational state of complete inner stillness and emptiness is about as real as the idea of indefinitely deepening relationships.

I introduced the Chuck character to personify capitalism, but not only is Chuck unnecessary, he is impossible. Real humans never completely accept the commerce system of ethics in the idealized way Chuck does, but they do differ in the strength of their guardian instincts. As a result, the weakest guardians in a strongly tribal system will likely be the first ones to behaviorally “leak” out into a neighboring weaker tribal system, triggering the process of accumulating environmental optionality.

This is the reason ideologies tend to be highly varied, but capitalism, wherever it takes root, tends to mostly embody a single uber-value: freedom.

This is not a result of conscious ideological choice by players of the capitalism game. Freedom in the sense of capitalism (as opposed to freedom in the sense of freedom fighter) is simply any new behavior that irreversibly breaks some strand of an infinite game defining some relationship.

Leaving your parents’ home to live as an independent adult is such a choice.

A fifth son leaving an ancestral village governed by primogeniture, to seek a fortune in the city, is such a choice.

Splitting a check accurately at a restaurant is such a choice.

Working harder to get a raise so you can hire a cleaning service instead of arguing with your spouse about chores is such a choice.

Ironically, this means that the most strident advocates of capitalism are actually strong Guardians, attached to particular functional forms of markets, organizations or legal systems, peculiar to specific times and places in history (this is the reason, in my map, I have market fundamentalists deep inside Guardian territory, marked by the Efficient Market Temple in the lower left). The most ardent champions of capitalism today, from the startup tribe of Silicon Valley, are among the strongest Guardian-tribal types I’ve ever met.

Passionate Guardian capitalists, I’ve found, are unable to truly enjoy things like the hilarious Libertarian Police Department story, or this Fry & Laurie sketch from Series 2, Episode 5, criticizing the idea that the increasing choice is a good thing (see for example, this tedious response by Conor Friedersdorf to the LPD sketch, or this pedantic-economist take on the Fry & Laurie sketch in the Financial Times).

This sort of thing reveals a deeper truth about capitalism: the workings of advertising and increasing choice are part of the natural, irresistible physics of behavior leakage from closed relationship systems. Even if you abjure violence and uninvited intervention, capitalism still wins in the long term. Even if there are no capitalist priests proclaiming free-market manifestos from Libertarian think tanks, capitalism still wins.

It just doesn’t win quickly enough to suit market fundamentalists in their own Alice-Bob style homesteads. Attempting to accelerate capitalism is as much a Guardian act as attempting to slow it down. Both require non-trivial levels of violence and direct intervention.

I have been thinking about this proposition — that capitalism can only be significantly accelerated in non-capitalist ways — a lot lately. “Natural” capitalism, so to speak, operates without ideological championship or abstraction. By drawing the Alices and Bobs of the world outside their cryptic cultural redoubts, it gradually weakens all closed communities and wires them up into one large community, connected through commerce.

Capitalism only stops where there is nobody to trade with and nothing to trade. If there is somebody, capitalism eventually figures out how to make an offer that cannot be refused. Where there is nobody to trade with, but there is something to trade, it simply expands its reach at a rate limited only by the rate of scientific discovery.

By definition there can be no Pope of capitalism, authoritatively declaring what it stands for in terms of values. There can no Vatican or Mecca. When it comes to a defense of capitalism, as Al Qaeda discovered after 9/11, there is no there there to defend (and therefore nowhere to attack), and more importantly, no definable place from which to defend it.

So the twist in my tale is this: Alice and Bob are Chuck.